How to deal with a CCJ
We take a look at your three main options:
- Pay the CCJ
- Change the payment terms
- Appeal the CCJ itself
CCJs are legal demands to repay debts when you have not responded to previous payment requests. They can seriously affect your credit score and your ability to get credit. A CCJ will stay on the Register of Judgments, Orders and Fines and your credit file for six years from the date of issue.
If you have found an unexpected CCJ on your credit report, it could come as a nasty shock. But it’s important you deal with it as soon as possible to prevent any further legal action against you.
Perhaps you didn’t receive the initial ‘letter of claim’ forewarning you of a CCJ and giving you 30 days to pay in full. And maybe you only found out about your CCJ when you checked your credit report or were turned down for credit.
If this is the case, you wouldn’t have had a chance to challenge the CCJ or pay it off in full at the time. Without a response from you, the court would have automatically recorded the CCJ on your credit file as a ‘default judgement’.
However, there are things you can do in this situation, such as paying the debt, changing the payment terms or appealing the CCJ itself. We explain your three main options, as follows:
If you can pay
If you agree that you owe the money, then you need to make sure you maintain your payments on time, every time towards the debt. If you miss a payment it could lead to further legal action and court fees.
With this in mind, it could be worth setting up a direct debit or standing order so you never miss a payment in the future. This will either be to your creditor or their solicitor, not the court.
If you are unsure of the terms set out in the judgement (such as what you owe, who and how to pay and the deadline) you can check the Register of Judgments, Orders and Fines online for a small fee of around £6-10.
Once it is paid in full, the CCJ will be updated on your credit file from ‘unsatisfied’ to ‘satisfied’.
You can also request a Certificate of Satisfaction from the court for a £15 fee, to show to future lenders.
To obtain a Certificate of Satisfaction, you will need to send proof of payment to the court, along with an N443 form. This is another reason why it’s best to pay by direct debit or standing order as you will have a record of payments on your bank statement. If you don’t have any proof you will need to mention this on the form.
If you want to change the payment terms
If you find a surprise CCJ on your credit file, you may be landed with unaffordable repayment terms, as your incomings and outgoings won’t have been taken into account when the judgement was drawn up.
Make sure you contact the court as soon as possible if you find the payments unaffordable. The payments terms of a CCJ can vary from a demand for the full amount or being split into regular instalments. Whatever the arrangement, you can ask the court to ‘vary’ the payment terms if you cannot afford the CCJ terms as they stand.
For example, you could ask to reduce your weekly or monthly instalments by filling in an N245 form with your incomings and outgoings to show your affordability. You may have to pay a £50 fee, but you might be able to get this for free if you have a low income and fill in this form.
The process can take a few weeks to resolve, as the court will then refer your documents to your creditor to see if they agree to the new terms. Bear in mind there is no guarantee that your new offer will be accepted.
Remember to keep paying your instalments in the meantime to avoid further legal action.
If you want to appeal the CCJ
If you are sure you don’t owe the debt, you could ask for it to be ‘set aside’ and removed from your records. You will need to complete an application notice (N244) and send it to the court to request a cancellation of the judgement. You will also need to appear in court to explain why you don’t owe the money.
If your request is granted, then you will be back in the position you would have been in just before the judgement occurred. So you will be able to put your argument forward if you didn’t have the chance to do so initially.
This process may also cost you £255 in court fees and you will need to attend a hearing. So it’s only worth doing if you have strong legal grounds for not owing the debt. If you are unsure, it is best to contact a debt charity like StepChange who can give you free advice.
How much does a CCJ cost?
As mentioned above, various court fees may be applicable if you want to vary the terms of the CCJ or appeal it. It can cost £50 to request a change in the payment terms, and £255 to appeal a CCJ, due to the extra work involved. It also costs £15 to request a Certificate of Satisfaction once the debt is paid in full.
However, if you have a low income, you may be exempt from fees if you fill in the form on the Government website.
What happens if I don’t pay?
If you don’t pay a CCJ, it could lead to further action. For example, your creditors could instruct bailiffs to seize your goods up to the value of your debt. Or, if you are a homeowner, they could get a charging order to secure the debt against your property. They may even contact your employer to put an attachment of earnings in place, which would deduct funds from your wages towards the debt automatically.