A County Court Judgment (CCJ) under the Consumer Credit Act 1974 is a Court order issued by the County Court against an individual or a company that has failed to repay a debt. It is a civil judgment, meaning it does not result in a criminal record, but it can have serious financial consequences on the individual or company it is made against. One of the most significant impacts is on a person’s credit report/credit rating, as a CCJ is entered in the Register of Judgments, Orders and Fines, which is publicly searchable. It can make it difficult to obtain a mortgage, loan, credit card, or any other form of credit. Many people only become aware of a CCJ when they apply for credit and are refused due to a record appearing on their file.
CCJs can arise from various types of debt, including unpaid loans, overdue bills, or outstanding invoices for goods or services. Once issued, a CCJ remains on the debtor’s credit reference agency’s records for six years unless it is marked as satisfied by being paid in full within one month of issue. Creditors can also apply to enforce the judgment through further action, such as bailiff enforcement, attachment of earnings orders, or charging orders.
It is recommended that debtors settle their debts promptly to avoid additional interest and legal costs. However, there may be grounds to dispute a CCJ if a debtor believes it was wrongly issued. Seeking legal advice as soon as possible is crucial in such cases.
If you have received a CCJ or are seeking to issue one against a debtor, our commercial and dispute resolution teams at AFG Law are available to assist you. Please get in touch with us today.
How to obtain a County Court Judgment
If someone owes you money and has failed to repay the debt, then you can take Court action to issue a CCJ against them.
Sending a Letter Before Action (LBA)
Before starting Court proceedings, you must send the debtor a Letter Before Action (LBA) or Pre-Action Protocol Letter stating the full amount owed, a deadline for payment (usually 14 days for businesses or 30 days for individuals) and your intention to take further legal action if the debt is not repaid.
This letter gives the debtor an opportunity to settle the debt before Court action, and in accordance with the Pre-Action Protocol for Debt Claims, a period of 30 days should be given for a Letter of Response to be provided, and before any litigious steps are taken.
If a positive response is received to the Letter before Action, then reasonable steps should be taken to try and resolve the dispute before any steps are taken to issue proceedings, and pursuant to the Overriding Objective of CPR 1.1, use of Court resources should be utilised as a last resort.
Filing a County Court Claim
If the debtor does not respond or refuses to pay, you can issue a claim through the Civil National Business Centre (CNBC) or online via the Money Claim Online (MCOL) service. The Court will then serve the claim on the debtor, who has 14 days to respond with an Acknowledgment of Service, and subsequently a Defence if they wish to challenge the claim.
The Debtor’s Response
The debtor has several options upon receiving the claim:
- Pay the debt in full – If the debt is paid, the case is closed.
- Acknowledge the claim – If the debtor needs more time, they can submit an Acknowledgement of Service and extend their response time to 28 days.
- Defend the claim – If the debtor disputes the debt, they can file a defence. The case may then proceed to a Court hearing.
- Ignore the claim – If the debtor fails to respond, you can request a CCJ in Default.
Obtaining a CCJ
If the debtor does not respond or loses the case, the Court will issue a CCJ, confirming that they owe the debt. The CCJ will state how much is owed, how it is to be paid and a deadline for the payment.
Enforcing a CCJ
If, following a CCJ, the debtor still does not pay, various enforcement actions can be taken, such as instructing bailiffs to recover the debt by seizing goods that could be sold to cover the outstanding amount. Creditors can also apply for an attachment of an earnings order, which deducts money directly from the debtor’s wages, or a charging order, which secures the debt against their property. Additionally, creditors may seek a party debt order, which allows them to recover funds directly from the debtor’s bank account.
In cases involving more significant sums, creditors may escalate enforcement to the High Court, where judgments, orders, and fines can be enforced with greater authority.
Removing and Disputing a CCJ
If a County Court Judgment has been issued against you, it may be possible to have it set aside or removed in certain circumstances.
A CCJ must be set aside if it was wrongly entered. This can happen if the time limit for filing an Acknowledgment of Service or a Defence had not yet expired when the judgment was made. Additionally, if the debt had already been paid in full before the judgment was issued, the Court is required to set it aside.
In some cases, a Claimant may fail to comply with Court rules before obtaining the judgment, making it procedurally irregular. Since compliance with Court procedures is mandatory, it is important to check whether the Claimant followed the correct process when obtaining the judgment. If they did not, the judgment may be invalid and should be removed.
It is also worth noting that even if the judgment was correctly entered, the Court has the discretion to set it aside in certain situations. If the claim form was sent to an old address and you did not receive it, you may be able to argue that you were unaware of the claim and were, therefore, unable to respond. The Court may also consider setting aside the judgment if you can demonstrate that you have a real prospect of successfully defending the claim.
Anyone seeking to set aside a CCJ needs to act quickly, as the Court will take into account how promptly the application is made. The process involves submitting an application using Form N244, along with evidence supporting the request, such as proof that the claim form was not received or that there is a valid defence. The Court requires a small fee to process the application.
If the application is successful, the Court will remove the judgment from the record, and the case may either be dismissed or proceed to a full hearing, where you will have the opportunity to defend the claim.
How can our Solicitors Assist?
Our firm offers comprehensive support regarding County Court Judgments, whether assisting in obtaining or challenging them, with specialised teams to assist clients on both sides of the process.
Our commercial team can guide and represent clients seeking to obtain a CCJ against a debtor, helping clients navigate the legal procedures and maximise their chances of successful recovery. Conversely, our dispute resolution team specialises in disputing and defending against CCJ claims. They can represent clients who believe a CCJ was wrongly issued or who wish to defend against a claim.
If you would like more information on our services, please do not hesitate to get in touch with a member of our team today. We can be contacted at 01204377600 and disputeresolution@afglaw.co.uk.
