Debts that go to court

The CCJ claim form won’t come out of the blue. There are several steps your creditor needs to take before things get to this stage. 

Before a creditor can start any court action they must try and come to an agreement with you first. This is called pre-action protocol for debt claims.

You should have already received a letter of claim form giving you several options to reach an agreement and you needed to respond within 30 days before your creditor can issue a default notice ahead of starting a CCJ claim.

If you and your creditor have been unable to come to an arrangement or you didn’t reply to the letter of claim within 30 days, they must send you a warning letter or default notice. This is to let you know that you need to repay what you owe, otherwise legal action will begin.

For credit agreements regulated under the Consumer Credit Act, you must be sent a default notice, at least 14 days before any action is taken.

The letter or notice should tell you how you can respond and what action might be taken if you don’t.

It must also include a copy of the Financial Conduct Authority’s default information sheet.

If you didn’t respond to the default notice or you were unable to reach an agreement, the creditor will issue a CCJ claim form.

If you get any letters or notices and are unsure how to deal with them, get advice straight away. This will let you deal with the claim correctly so the court can take your circumstances into account when they decide how you should repay the debt.

If you ignore the letter or notice, the court will still issue the judgment but they won’t be able to take your circumstances into account.

They could, for example, order you to pay back the debt all in one go when it would be impossible for you to do so.

When you receive a CCJ claim form you usually only have 14 days to respond unless you need to ask for an extension, so it’s important you don’t ignore it. You’ll need to fill in the reply form which includes an Income and Expenditure form – detailing all your income and outgoings.

This will show the court how much money you have to pay off the debt.

Your options are:

• Filing a defence if you disagree with the amount you owe.
• Admitting the claim if you agree you owe the money your creditors are claiming. You’ll also need to fill in a form giving the court details of your financial circumstances and you will be asked to make an offer of payment.
• Submitting an acknowledgement of service if you intend to defend the claim but need longer than 14 days to prepare your defence.

Once the court has looked at all the paperwork, they can issue:

• a judgment by instalments, where you pay the debt off over time, or
• a judgment forthwith, where the whole amount you owe is due immediately.

It’s a good idea to go to court as it might give you a chance to tell your side and agree a suitable repayment if judgement is made against them. But it’s not compulsory.

If you’ve admitted the claim and made a monthly offer of payment, it’s likely that you’ll receive a judgment by instalments.

The monthly repayment rate will be set by the court using the information you provided in your admission form.

If you don’t respond to the claim and the court can’t take your circumstances into account, they’ll still enter a judgment against you.

This is called a judgment in default and might be a judgment by instalments or a judgment forthwith.

In both cases, you can ask the court to look at this again if the repayments are more than you can reasonably afford. This is called a redetermination.

The CCJ process has different rules depending on whether you’ve met certain timescales.

If you receive a CCJ and don’t keep to the terms it sets out, the creditor can ask the court to enforce the debt.

There are several ways that they can do this:

• bailiff action
• Charging Order
• Attachment of Earnings Order.

A creditor can apply to the county court for a bailiff to collect the debt. If the court grants permission, it will issue a Warrant of Control.

This gives the bailiff the power to visit your home or business to collect the money you owe, or to seize goods that could be sold to repay the debt.

You can ask the court to suspend the warrant and let you pay back the money at an affordable rate. Get help from a free debt adviser to do this.

An Attachment of Earnings Order asks for the money owed to be deducted by your employer from your wages.

If you own a property (either with a mortgage or outright) the creditor can ask for a Charging Order to be secured against it.

This means your debt will be repaid when your property is sold or re-mortgaged and you can deal with the repayment of the debt at that point.

As a last resort, your creditor may force a sale to reclaim the money they’re owed but it is unlikely if this is your main home and especially if you’ve got people who depend on you living there too.

If you have a Charging Order, you can get help from a debt adviser to find out more about what this means for you.

Your CCJ will be registered at the Register of Judgments, Orders and Fines (maintained by Registry Trust Ltd and made public on its website TrustOnline where anyone can carry out a search on an individual or business), it will also be on your credit file.

If you pay off a CCJ in full within 30 days of receiving the judgment, you can apply through the court to have it removed; otherwise it will remain on the Register for six years.

This record can seriously affect your ability to get a mortgage, a credit card or even a bank account in the future. This is another reason it’s important you don’t ignore a County Court Judgment.

The court will set aside a judgment if it has been:

• Entered in error
• Paid before the court date
• Cancelled because full repayment was made within one calendar month of the judgment date

If a judgment was entered in error, an application can be made to the court to have the judgment set aside for which a court fee of £255. If you have fully paid the CCJ within a month of the judgment date, you can apply to have it set-aside/cancelled by providing the court with proof of payment.

If set aside or cancelled, the CCJ will be removed from the Register of Judgments, Orders and Fines and the credit reference agencies will be notified to remove it from their files.

If a CCJ relates to an insurance claim against an individual, Registry Trust (which maintains the Register of Judgments, Orders and Fines) will notify the credit reference agencies to remove the judgment data from their files, on receipt of an original signed letter on headed paper from the insurers or insurer’s solicitors stating:

• That the judgment relates to an insurance claim 
• County Court name
•  Case Number
•  Date of judgment
•  Amount of judgment

The letter must be posted to:

Registry Trust Ltd
Insurance Cancellation Request
153-157 Cleveland Street
London
W1T 6QW

Or emailed to: [email protected]

Visit the Registry Trust website to find out more and contact them with queries about cancelling and satisfying CCJs.

CCJs are shown as either satisfied or unsatisfied on the Register of Judgments, Orders and Fines (maintained by Registry Trust Ltd). ‘Satisfied’ means you have paid in full (partial settlements are not currently recorded), ‘unsatisfied’ means you have not. You can ask the court for this to be corrected if it is wrong.

If you have fully paid the CCJ more than a calendar month after the judgment date, you can apply to have it shown as satisfied by providing the court with proof of payment.

The satisfied judgment will stay on the Register for the statutory six years from the date of the judgment but show that your debt has been fully paid and the date it was paid and the credit reference agencies will be notified to remove it from their files. If you require a certificate showing that your record has been paid, you can apply to the relevant court for a ‘Certificate of Satisfaction’. There is a court fee of £14 for the certificate.

Read more about dealing with CCJs on the Registry Trust TrustOnline website

If you find you’re struggling to make your repayments, speak to a free debt adviser before things to get to a stage where the court is involved.

They’ll be able to talk you through your options for dealing with debts and help you find a solution that’s right for you. If you’ve fallen behind with payments, it’s important to follow these steps:

• Reply to your creditor and fill in any forms within the deadlines you are given.
• If you need more time to collect essential evidence, let your creditor know before the deadline for responding.
• Make sure you fill out a financial statement so they can see how much you have to pay towards your debts. A free debt adviser can help you do this.

If you keep talking to your creditor and the court, you should be able to come to an arrangement that allows you go on making payments you can afford and avoid court action.

In Scotland, the process is different, and called ‘enforcing a debt by diligence’.