Explaining The County Court Judgment (CCJ) Process

What is a County Court Judgment?

A County Court Judgment (a CCJ) is a Court Order which states that you owe money to a third party. If a CCJ is entered against you, this means the Court has formally decided in favour of the Claimant (the person issuing the claim) that you owe the money. You will receive the CCJ in the post and it will confirm:

1. Who you owe the money to;
2. How much you owe;
3. How to pay (in full or instalments); and
4. The deadline to pay.

It can be a worrying time when a CCJ arrives through the letterbox, or when you are being contacted to repay money by a Claimant (also known as a creditor) before a CCJ is registered. The process can be daunting, leading to a feeling of anxiety. Our initial advice is to seek immediate legal advice from a firm of Solicitors, or independent advice charity to discuss the options available to you. The situation can feel overwhelming and it is tempting to ignore the CCJ, but we urge you not to do this, as removing a CCJ from your record can be adversely affected by delays.

In this article we outline steps you can take to avoid the registration of a CCJ or if one is already registered, ways to remove a CCJ.

What to do before court proceedings are issued

Under the Pre-action Protocol for Debt Claims (“the Debt Protocol”), in advance of issuing Court proceedings, a creditor must send the debtor a pre-action protocol letter, known as ‘Letter Before Action’ or a ‘Letter of Claim’. The Letter of Claim must set out the sums owed, usually evidenced by an invoice, statement of account, or contract, and will request payment within 30 days (for businesses is usually 14 days). The Letter of Claim must enclose a Reply Form and a Standard Financial Statement for the debtor to complete. When completing the Reply Form, you can request additional time or information, if required. If you cannot pay the debt at that time, there are options available to you and further guidance can be found here.

Receiving a Letter of Claim

If you do not reply to the Letter of Claim within the prescribed time, the creditor is entitled to issue a claim against you for the sums owed, without further notice. Therefore, it is very important to act promptly and engage with the creditor.

The Debt Protocol aims to encourage parties to engage and resolve the dispute without the need for Court proceedings. This means if proceedings are issued, the Court will take into consideration whether the parties have complied with the Debt Protocol by making reasonable efforts to resolve the matter prior to issue,. Failure to do so  can lead to sanctions and affect future orders for costs. If you did not receive a Letter of Claim but a claim has been issued against you, you should make the Court aware of this and we recommend seeking legal advice so that you can investigate this further and seek more detailed advice relevant to your case.

We appreciate it can be stressful to engage with a creditor but in our experience, a successful resolution without a CCJ being registered is more likely if you actively engage with the creditor at this stage. If you receive a Letter of Claim but you are not sure how to respond, please do not hesitate to reach out to us.

County Court Claims

As set out above, if you fail to reply by the given deadline, the creditor will be entitled to proceed with issuing a claim in the County Court against you.

Once a claim is issued, you will receive a formal document called a ‘Claim Form’. You should also receive a small bundle of documents known as a ‘response pack’. The response pack includes an admission form, defence form, and acknowledgement of service. It depends on whether you admit or dispute the claim as to which forms you should complete.

There are several ways that you can respond, which are as follows:

1. If you agree you owe the debt you should contact the creditor to arrange payment to bring the matter to a close before the deadline on the claim form;
2. If you do not agree with the sums that have been claimed then you can file a Defence to the claim, which must be submitted by the deadline on the claim form. If you file a Defence the case will proceed as a defended claim, and you will receive further instructions (known as directions) from the Court. We provide some brief guidance on completing the defence form further on in this article;
3. If you are not sure whether you owe the debt and need additional time to investigate further, seek legal advice or need more time to file your defence, you can file an Acknowledgment of Service to the claim which will give you a further 14 days to respond (so, 28 days in total); and
4. If you do not respond by the deadline, then the creditor can proceed with a request to enter a CCJ against you in default.

In cases where you need additional time after having received the claim form (more than 28 days) then you may be able to agree an extension with the creditor, but this will be at their discretion.

In most cases, the Claim Form is received by the Defendant (the person against whom the claim is issued) via post and sent to the address cited on the Claim Form. This address is generally the usual or last known residence for an individual, and the principal office of a company (usually its registered office address). Under the Court rules, you are not required to sign for receipt of the Claim Form in England and Wales, so it can just be posted through the letter box. As long as the claimant has not received anything confirming that you have moved from the address, the Claimant is entitled to assume that this has been received by you. Therefore, if you have moved from an address, it is really important to notify all of your creditors immediately, to avoid claims being sent to old addresses without your knowledge.

In particular, it is vital to notify the Driving and Vehicle Licensing Agency (DVLA) of any changes to your address as you are required to do so, by law. Failure to do so can result in a fine of up to £1000.00 being issued.

How can I stop a CCJ?

We strongly urge you to engage with the creditor before proceedings are issued, to prevent the registration of a CCJ. However, we understand that circumstances can arise where you do not receive the letter on time or are not in a position to deal with it, which can lead to a claim being issued against you. Again, acting promptly if you can, is key.

As outlined above, when you receive a claim form there will be a deadline to respond. It is vital that you respond within the prescribed time limit taking one of the steps outlined above, to avoid a CCJ being entered. If you only become aware of the Court proceedings once a CCJ has been registered against you, there are still options available to you to remove a CCJ and you can find further information here.

Completing the defence form

The Defence form is completed if you wish to dispute a claim. You must set out in your Defence which paragraphs in the Particulars of Claim (the summary of what the claim is for as set out by the Claimant) you admit, dispute or require the Claimant to prove. It may be that you neither admit nor dispute a paragraph set out in the Defence and if so, so you can just note this point. It is important when completing a Defence that it is submitted to the Court within the relevant time frame and also that it is supported by a ‘Statement of Truth’. A statement of truth verifies to the Court that you are certifying that the content of the Defence is true. You can be held in contempt of court if you sign a false statement of truth, so ensuring it is factually accurate is vital.

The impact on your credit score

If you allow a CCJ to be entered against you, it can be very detrimental to your credit profile. Lenders look at credit profiles when making decisions on whether to lend money to a debtor. If they see a CCJ on your record, it automatically gives the impression that you are not good at managing your finances or are in financial difficulty and are going to be unable to repay them the money they lend you. This means they are either likely to reject your application for credit or you may be subject to a less favourable product (i.e. a higher interest rate).

A CCJ that is marked as unsatisfied is the most detrimental as it means the money remains outstanding to the creditor. One that is marked as ‘satisfied’ is still not ideal, but not as bad as it shows you have paid it, albeit late. You have 28 days from the date of the judgment to pay it before it is registered on your credit record, after which point it remains registered on there for 6 years.

Specialist CCJ removal solicitors

Ellis Jones have a specialist team of Solicitors and Paralegals who regularly deal with the removal of CCJs and we would be delighted to assist you in advising on whether you are likely to succeed in applying to remove your CCJ. To make an enquiry, please do not hesitate to contact our specialist Dispute Resolution team on 01202 525333 or CCJ@ellisjones.co.uk.