What is a County Court Judgement (CCJ)?
A County Court Judgement (CCJ) is a court order issued against you, saying that you owe someone money and must make a repayment.
A CCJ is a result of a creditor making a claim against you, usually after you have failed to keep up repayments on a loan, credit card, or other financial agreement. When a creditor files a claim, the court will send you a 'Claim Form' setting out how much the creditor says you owe, and giving any other details of the claim. At this point, if you settle the debt no more action should be taken.
If you can't repay the amount in full, you will give you a chance to explain your situation by filling in an 'Admissions Form' describing your income and expenses. You will also have the chance to make an offer to repay the debt either in full or by a repayment schedule.
You're given 16 days to return this form, or if you disagree that you owe the money you could fill in and return a 'Defence Form' to the court instead, explaining in full why you disagree with the claim. You can also ask for a further 14 days delay to give you chance to prepare your defence.
The next stage is a simple, private court hearing which doesn't need you to be present so long as you have provided all the information the court has asked for in the Admissions Form.
If the court agrees that you owe money to a creditor, it will issue an order saying so, and it is this order which is called a CCJ. The court will also decide on a repayment schedule, either sanctioning one you've agreed with your creditor in advance, or alternatively setting one based on the information you've provided about your financial circumstances.
Even at this late stage it's possible to stop the CCJ being placed on record - if you repay the full amount within one month the order will be cancelled.
The effect of a CCJ on your credit rating
If you don't clear the debt recorded on the CCJ within one month of it being issued, then it will be recorded on the Register of County Court Judgements for a period of 6 years, and this will have a serious impact on your credit rating.
Credit reference agencies will include details of the judgement on your credit file, which financial companies use when deciding whether or not to approve finance applications. The presence of a CCJ on your record means that it will be very difficult to get unsecured credit, although many companies will still be willing to provide secured finance such as a mortgage or secured loan, providing you have some level of equity in your home.
Can I remove a CCJ from my record?
In some specific circumstances, it's possible to have a CCJ removed from your credit file. If you repaid the debt within a month of the judgement being granted, then it shouldn't have been placed on your file and you can insist that it is removed. You can also ask the court to 'set aside' the judgement if you can show there is a genuine reason you disagree with it being granted. If the court decides in your favour, the CCJ will be removed from the records and the whole process starts again with your creditor making a claim.
Finally, if you clear the debt within the six year period, then you can have the CCJ marked as 'satisfied' on your record. This doesn't mean that it is removed from your file, but it will reduce the harm it does to your credit worthiness.
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