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What is a CCJ?
CCJ stands for County Court Judgement. It’s handed out to people in England, Wales and Northern Ireland who have failed to pay back money that they have borrowed – whether on a credit card, loan or mortgage. In Scotland, the equivalent of a CCJ is called a decree.
A lender can apply for a CCJ if you stop making your agreed repayments to them and they are unable to come to a solution with you. If you are sent a CCJ, it means the court has decided that you owe the money to your lender and you must repay it.
A deadline to repay
When you owe money to a lender, they should send you letters outlining the amount you owe and when it needs to be repaid. If you don’t reply to these letters and ignore other attempts by your lender to get in touch, the lender will send you a warning (either a default notice or letter before action) to let you know they are planning to take legal action. They might then go to the courts to get a court claim against you.
You have 14 days to respond to a court Claim Form by repaying the full amount, paying what you think you owe or defending yourself if you don’t think you owe anything. If you don’t respond after 14 days, you’ll likely be issued with a CCJ, and you may have to pay more.
A mark on your credit history
In a CCJ, there will be information on:
- How much money you owe
- Who you owe the money to and who you should pay
- How you should pay
- How long you have to pay.
Unless you repay everything included in the CCJ within a month, it will be marked on your credit history for six years. Having this on your credit history can make it difficult to borrow, so it’s important to try to never let things get to this stage.
If you’re certain you don’t owe the money, you can apply to have the CCJ cancelled. You can find out more about this on the gov.uk website here.
But if you do owe the money, your priority should be paying it off in any way you can. You should be able to pay back the debt in instalments, and you might have the option of changing the amount you pay each week or month. For more details on how you should pay a CCJ off, head to the gov.uk website here.
Don’t ignore the problem
It’s really important to remember that ignoring the problem won’t make it go away. Ideally, you should reply straight away if you get any letters through about overdue borrowing.
Even if you can’t afford to repay at that time, your lender can’t help you if you don’t speak to them and let them know you’re struggling. Many firms have a system in place for customers that have fallen into difficulty, and they would much rather come to an arrangement with you than go through costly legal action.
You can find out more about CCJs and how it affects your borrowing in our guide here.