What is a County Court Judgement?
This is a type of court order which is typically sent to a borrower if they fail to remit payments for a debt owed. A CCJ is usually used by creditors seeking to pursue money owed by external parties and it can only be issued in England, Northern Ireland and Wales. Scotland uses a different method of pursuing creditors known as “Enforcing a Debt by Diligence.”
When an individual fails to remit loan repayments and they have no arrangement with the creditor on how the outstanding debt will be settled, they can receive a CCJ. Under the Consumer Credit Act, a CCJ should be preceded by a warning letter such as a ‘letter before action’ or a default notice at least 14 days before the creditor takes any action. The warning sent to the borrower outlines the steps that they can take to resolve the issue at hand and what is bound to happen should the borrower fail to heed the warning letter.
What Can I Do on Receiving a County Court Judgement?
Before the CCJ is sent by the creditor, you should receive a warning letter from your creditor outlining how you can resolve the issue at hand and the consequences of failing to resolve the issue. Within a two-week period after receiving the letter, consider seeking financial advice from a professional on the best way forward.
Ideally, you should attempt to reach an agreement with your creditor within two weeks after receiving the CCJ. Note that should you ignore the warning, the court will issue a CCJ without hearing your version of events.
When issued with a County Court Judgement, you will have two weeks to respond. In your response, you can either admit to the creditor’s claim or dispute it. If you admit to the claim, you should fill an N9A admission form which will provide varied information such as details of your income, expenditure, and, an offer on how you intend to settle the debt. On the other hand, if you want to dispute the creditor’s claim, it is advisable that you seek the assistance of a financial expert.
If you respond to the CCJ with an offer and the creditor accepts it, the court should then send out another judgement setting the rate at which you should make repayments to your creditor. If the creditor rejects the offer, the court should send out another judgement detailing how much you should repay your creditor and at what rate.
In some cases, it may be impractical for you to afford the amount set out by CCJ as repayment. In this case, you can ask for a redetermination. This means that the court will go back to the drawing board and review your case before coming to a final decision. In order to apply for a redetermination, you should write to the County Court explaining why you cannot afford to make the set repayments. The letter should be accompanied by financial evidence to support your claim.
Note that though receiving a CCJ can be alarming, a quick response to the judgement can help aid in the quick resolution of the matter.
What Happens After a County Court Judgement Has Been Issued?
If the borrower ignores the terms set out in a CCJ or they cannot fulfill the terms spelt out in the judgement, then the creditor can ask the court to take the following steps …
- Issue a Warrant of Execution
The lender can request the court to send out bailiffs to collect the money owed or to attach items whose value is equivalent to the outstanding loan amount. However even if the court issues a Warrant of Execution, the borrower can appeal for the court to halt the warrant for them to repay the debt at an affordable rate.
- Issue an Attachment of Earnings
The creditor can also request the court to allow for the outstanding loan amount to be deducted directly from the earnings of the borrower through what is known as an “Attachment of Earnings Order.”
- Issue a Charging Order
The creditor can also request the court to allow for the outstanding debt to be secured against property owned by the borrower. Should the borrower fail to pay the outstanding loan in full, then the attached property can be seized in favor of the creditor.
Will a County Court Judgement Affect My Credit Report?
A CCJ will stay on the borrower’s credit report for up to six years if the outstanding loan is not paid in full within 30 days after the CCJ has been received. It will also appear on the register of county court judgements.
Since most lenders look at a person’s credit report when determining loan applications and other credit facilities, a CCJ on your report may point to a poor repayment history in the past. Note that the CCJ will only be marked as satisfied on the credit report if it is repaid in full within six years from the date of entry.