What is a County Court Judgment (CCJ)?

Before one of your lenders can start a CCJ claim, they must try and reach an agreement with you first. The CCJ process follows these steps:

1. You receive a letter of claim

The letter of claim will give you a number of options to reach an agreement. You must respond within 30 days.

2. You receive a default notice

If you and your lender are unable to reach an agreement or you didn’t respond to the letter of claim within 30 days, your lender will send you a default notice.

The default notice warns you that you need to repay what you owe or your lender will begin legal action. For credit agreements regulated by the Consumer Credit Act, lenders must send you a default notice at least 14 days before they start legal action.

The default notice will explain how to respond and what action will be taken if you don’t.

3. You receive a CCJ claim form

If you and your lender are still unable to reach an agreement or you didn’t respond to the default notice, you’ll be sent a CCJ claim form.

You usually only have 14 days to respond to a CCJ claim form. You must fill in the reply form which includes details of your income and what you spend your money on.

This is so the court can see how much money you have to pay off the debt.

When replying to a CCJ claim form, you have three options:

• file a defence if you don’t believe you owe the amount stated
• admit you owe the money, provide details of your financial situation and make an offer of payment
• submit an acknowledgement of service if you plan to defend the claim but need more than 14 days to prepare a defence

4. The court makes a judgment

The court can make one of two judgments:

• a judgment by instalments, where the debt is divided up into monthly repayments
• a judgment forthwith, where you pay the full amount immediately

Going to court gives you a chance to tell your side and make sure the payments are manageable if a judgment is made against you. But you don’t have to.

If you admit the claim and make an offer of payment, you’ll probably receive a judgment by instalments.

If you don’t respond to the claim, the court will still make a judgment against you. You can ask the court to look at your case again if the repayments are unaffordable.

In certain situations, the court will cancel a CCJ.

They may do this if:

• a mistake has been made in the CCJ process
• the CCJ is paid off in full within one calendar month of the judgment date

If this happens, it will be removed from your credit file. Find out more in our guide How to remove a CCJ from your credit file.

A CCJ stays on your credit file for six years from the date of the judgment. You’ll probably find it harder to borrow from mainstream lenders during this time.

The official name of the CCJ Register is the Register of Judgments, Orders and Fines. All the information on the register is public, meaning anyone can access it. The Register is looked after by the Registry Trust.

If you get a CCJ, it will be recorded on the Register for six years.

During that time:

• lenders will be able to see you have a CCJ
• for a fee of £4, anyone can check if you have a CCJ

The CCJ will be removed from the Register after six years, whether you’ve paid it off or not.

If the court made a judgment forthwith, you’ll be expected to pay the full amount you owe immediately.

If the court made a judgment by instalments, the amount of time you’ll get to pay off your CCJ debt will usually depend on how much you owe and how much disposable income you have.

If you included details of your monthly income and spending with your claim form, the court will try to set your monthly payments as high as possible while making sure they’re affordable.

This means the lender gets their money back as soon as possible without causing you unnecessary financial hardship.

Regardless of how long you take to pay off the debt, the CCJ will show on your credit file for six years unless it’s cancelled for the reasons outlined earlier in the guide.

If you don’t make your CCJ payments, your lender may take further enforcement action to try and recover the money you owe.

This includes:

• Sending bailiffs (enforcement agents) to your home
• Applying to have the money taken directly from your wages or benefits
• If you’re a homeowner, getting the debt secured against your home, which can lead to repossession
• If you owe more than £5,000, applying to make you bankrupt
• Forcing your bank or building society to pay them what you owe from any accounts you have

If you’re struggling to make CCJ payments, it’s important not to ignore the problem. Get in touch for free debt advice.