What is a CCJ?
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. Receipt of a CCJ means that the court has formally decided that you owe the money, and will detail:
- The amount you owe
- How you can pay it
- When it needs to paid by
- Who the payment should go to
A CCJ will stay on your credit file for six years, even if you have paid it off in full during this time. After six years, the CCJ will drop off your file, whether you have paid it all off or not.
How to deal with a CCJ
If you receive a CCJ, you have three options available to you, depending on your circumstances, you can:
- Pay the CCJ
- Change the payment terms
- Appeal the CCJ itself
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.
If you missed the initial ‘letter of claim’ or only noticed the CCJ when an application for credit was turned down, then 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. We explain your three main options, as follows:
How to pay off a CCJ
If you agree that you owe the money, then you need to make sure you maintain your debt repayments on time, every time. 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, to who and how to pay) 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.
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 payment terms of a CCJ can vary, so 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.
Can you get a CCJ removed?
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 before the judgement occurred.
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 first 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.
Remember, if you have a low income, you may be exempt from court fees.
What happens if I ignore a CCJ?
You should never ignore a CCJ, and failure to pay 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.
Can I get a credit card with a CCJ?
Although being accepted for a credit card with a CCJ will be much more difficult, it’s not impossible. There are some lenders who specialise in credit cards for bad credit who may be able to offer a credit card with a more manageable limit to help you rebuild your credit over time.
However, you should carefully consider whether taking our more credit is the right decision for your circumstances, as any missed or late payments could further harm your credit score.