If you’ve received a County Court Judgment (CCJ), it means that a court has ordered you to repay a debt. Ignoring a CCJ can lead to serious consequences, affecting your finances and your future. While it may seem tempting to ignore it, it is crucial to understand the potential problems that could arise. In this article, we will break down what happens if you ignore a CCJ, the actions creditors may take, and what you can do to manage the situation.
What is a County Court Judgment (CCJ)?
A County Court Judgment (CCJ) is a legal order that requires you to repay money you owe. It is issued by a court when a creditor takes you to court to recover an outstanding debt. When you receive a CCJ, it means the court has found in favour of your creditor, and you are legally obligated to repay the debt.
Once a CCJ is issued, you have a few options on how to handle it, including paying the debt in full, setting up a payment plan, or disputing the claim if you believe the debt is incorrect. However, ignoring a CCJ is not an option, as it can lead to further legal actions and serious consequences.
Can I Ignore a CCJ?
It’s technically possible to ignore a CCJ, but doing so can be a huge mistake. Ignoring the judgment doesn’t make the debt go away. In fact, it may make things much worse. While you may think that leaving the issue alone will solve itself over time, the reality is that creditors will take action to recover the money you owe. These actions can include things like sending bailiffs to your property, freezing your bank account, or even forcing the sale of your property.
Ignoring a CCJ also means that it will be recorded on your credit file for six years, which can make it difficult to borrow money, rent property, or even find certain types of employment. In the long run, ignoring a CCJ can affect your financial stability and your ability to move forward in life.
How Should I Respond to a CCJ?
The best way to deal with a CCJ is to respond to it promptly and proactively. When you receive a CCJ, there are a few things you need to do. The first step is to read through the details carefully. You will usually receive a Claim Form from the court, which outlines the amount of money you owe and how to respond.
At this point, you have a few options:
- Pay the amount in full: If you are able to pay the full amount, this is the easiest solution. Once the debt is paid, the CCJ will be marked as “satisfied,” which is better for your credit file.
- Dispute the claim: If you believe the CCJ has been issued in error, you can dispute it. You will need to provide evidence to the court to support your claim.
- Set up a payment plan: If you cannot afford to pay the full amount immediately, you can apply for an installment order. This allows you to repay the debt in manageable amounts over time.
Failing to respond to the CCJ will result in the court issuing a judgment forthwith, meaning the full amount will be due immediately. This can trigger additional enforcement actions from the creditor.
What Happens if I Don’t Pay My CCJ?
If you choose not to pay your CCJ, either by ignoring it or by not making any payment arrangements, your creditor has several options to recover the debt. These actions can be quite serious and can affect your finances for years to come. Here’s what can happen:
Bailiffs Can Be Sent to Your Home
One of the first actions a creditor can take is to apply for a Warrant of Control, which allows them to send bailiffs to your home to collect the debt. Bailiffs have the authority to visit your property and take control of your goods in order to sell them at auction to cover the debt. They will usually give you a notice of their visit, and you can agree to a repayment plan to avoid further action.
However, bailiffs can only seize goods if you have signed a Controlled Goods Agreement, which typically happens after multiple missed payments. If you ignore the CCJ and refuse to cooperate, the situation can escalate, and you may lose valuable items.
Attachment of Earnings Order
If you continue to ignore the debt, the creditor can apply for an Attachment of Earnings Order. This means that a portion of your wages will be deducted directly from your pay to cover the CCJ debt. The court will assess your income and expenditure using a form called a statement of means (N56 form). You are required to complete this form, but if you fail to do so, it is a criminal offence.
This deduction will continue until the debt is paid off, and the creditor is required to notify your employer about the order.
Third-Party Debt Orders
Another option creditors have is to apply for a Third-Party Debt Order. This allows the creditor to take the money you owe directly from a third party, such as your bank or building society. They can also apply to your employer, pension provider, or insurance company to take the debt from your income.
Charging Order
A Charging Order can be placed against a property you own. This means that the debt is secured against your property, and if you do not pay, the creditor can apply for an order for sale, forcing the sale of your property to cover the debt. However, creditors can only apply for an order for sale if the debt exceeds £1000. This is usually a last resort for creditors who have not received any payment.
Bankruptcy
If the debt is substantial (typically more than £5000), the creditor can petition the court to make you bankrupt. This will have serious consequences. If the bankruptcy is successful, you will be required to surrender your assets, such as your home, car, or other valuable possessions. You will also be unable to borrow money for a period of time, as bankruptcy will remain on your credit file for up to six years.
What Can I Do if I Can’t Afford to Repay a CCJ?
If you’re struggling to pay a CCJ, it’s essential to take action as soon as possible. Ignoring the problem will only make things worse. Fortunately, there are several options available to help you manage your debt in a way that is more manageable.
Instalment Orders
If you can’t pay the full amount immediately, you can apply for an Instalment Order through the court. This allows you to set up a payment plan based on what you can afford. The court will assess your income and expenses to determine how much you should pay each month. To apply for an instalment order, you’ll need to complete form N245 and provide information about your financial situation.
Individual Voluntary Arrangement (IVA)
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors. It allows you to pay a fixed amount each month over a period of five years, after which the remaining debt is written off. An IVA is a great option if you have multiple debts, but you need to seek advice from a financial expert before proceeding, as an IVA will be added to your credit file.
Seek Professional Advice
If you’re struggling with a CCJ and are unsure how to proceed, it’s a good idea to seek advice from a professional, such as a debt charity or financial advisor. Many organisations offer free advice and can help you come up with a plan to manage your debts and avoid further legal action.
Conclusion
Ignoring a CCJ is never a good idea. It can lead to significant financial consequences, including bailiff visits, wage deductions, and even the sale of your property. By responding to the CCJ promptly and seeking professional advice, you can manage the situation and avoid escalating legal action. Whether you pay in full, set up a payment plan, or dispute the claim, addressing the issue early will help protect your finances and your future.
