Recent data shows that county court judgements (CCJs) are being handed out in record numbers, after many people found themselves struggling with debt in the final months of 2020. We know that the economic impact of COVID-19 has meant that more people than ever are having difficulties making repayments – and unfortunately, lenders are choosing to take court action to try and reclaim their money.
If you find yourself on the receiving end of this type of action, it’s important not to bury your head in the sand. A CCJ will have a serious impact on your credit report, and can make it difficult to borrow money or get a mortgage in the future.
Making repayments
The easiest way to deal with a CCJ is simply by following the terms of the judgement, which will usually mean making monthly repayments. If you continue to pay the correct amount each month, there’s little further action that your creditor can take. Eventually the debt will be repaid, and you can apply to have it marked as ‘settled’ on your credit file. This means that those looking at your credit history will still see the court action, but they’ll also know that you made your payments on time.
In cases where the CCJ is for a particularly small amount, you may want to consider paying it all off in one go, within a month of receiving the judgement. This is a good idea if you are planning to apply for credit (and particularly if you’re hoping to take out a mortgage), as it will wipe the CCJ from your file altogether.
Changing the payment terms
If you’re being asked to pay more than you can afford, it may be possible to have the terms of the CCJ changed to make your monthly repayments smaller. This will only be possible if you can demonstrate that you’re genuinely unable to make payments. You’ll need to fill in a form showing your income and monthly living costs, and offer an alternative payment amount. This is called applying for variation, and you’ll need to pay a £14 fee to have your offer considered. The relevant paperwork is available here.
Setting aside a CCJ
Do you think that the CCJ was given in error, perhaps because you’ve already repaid the debt or the paperwork was never received? In this case It may be able to have the CCJ cancelled. It can be quite tricky to get the judgement cancelled, and you need to be sure that you have a genuine case. There is also a cost of £255, and you’ll be expected to attend a hearing. If you believe that this is your best course of action, we would recommend speaking to an independent charity such as Stepchange to make sure that you’re on the right path.
What happens if I don’t pay?
Getting a CCJ makes it possible for your creditors to start taking stronger action to reclaim their debt – such as sending a bailiff around to make a collection. This means that it’s never advisable to simply ignore the judgement. Instead, make payments if you can and be upfront with your creditors if you’re struggling. An unpaid CCJ stays on your credit file for six years, and can have a serious impact on your financial health.
