Guide to County Court Judgements (CCJs)
A creditor (someone that has lent you money) must decide to take action against you by taking you to court for this to happen. If their complaint is upheld by the court it will issue a CCJ, which is essentially an order from the court instructing you to repay the debt or a smaller agreed amount.
How will a County Court Judgement (CCJ) affect my mortgage?
A CCJ will have a negative impact on your credit record and many lenders will reject your mortgage application outright. In the past, many lenders offered bad credit mortgages and so it was not as difficult to access a deal (albeit at a high rate of interest), even if you had up to three CCJs registered against you. However, the credit crunch has caused many lenders to rein in their criteria when deciding who to lend to. As a result, those with CCJs may find it extremely difficult, if not impossible, to find a mortgage.
How do I get rid of a County Court Judgement (CCJ)?
Avoid getting a CCJ by paying your bills in the first place – setting up direct debits should help if you’re prone to disorganisation when it comes to your finances. However, if you have been late or failed to pay bills in the past because you cannot afford the payments, you need to address the situation immediately. Look at your income and outgoings for items you can cut back on, such as expensive gym memberships or nights out on the town.
If you are still financially stretched, speak to your lender(s) – they may be able to work out a reduced payment plan with you to help reduce the pressure, at least for the time being. If you have a CCJ pending, it might be worth consulting Citizen’s Advice for help with your case.
If you can pay the amount outstanding, the hearing will not go ahead and you will not have a CCJ registered against your name. If you cannot repay the debt, there will be a private court hearing that you can attend. If you would prefer not to, you can simply post the information requested by the court. You will be asked to fill in a claim form, which will give you the opportunity to explain your situation. The court will then decide whether you owe any money and, if you do, how it should be repaid. This can be a one-off payment of the full amount or monthly instalments. (The process is different in Scotland.)
The CCJ is an order from the court instructing you to repay the debt or a smaller agreed amount. If you don’t repay, the creditor (the person or company you owe the money to) can ask the court to take steps to reclaim the debt. If you can’t repay you can ask the court to change the regular payments or suspend the order.
Unless you pay the full amount owed within one month, the CCJ will be recorded on the Register of County Court Judgements for six years. This will also be displayed on your credit record and will affect any future loan applications.
To find out whether a CCJ has been registered against you, contact trustonline.