What is a country court judgement (CCJ)?

As soon as you receive a claim form, you should talk to a free debt advice service immediately. The letter shouldn’t come out of the blue, as your creditor must send you a warning letter to let you know that you should repay what you owe them, or legal action will begin.

For any credit arrangements under the Consumer Credit Act, you must be sent a default notice at least 14 days before any legal action is taken. This notice should let you know how to respond, and what action will be taken if you don’t.

Getting debt advice will help you to deal with the claim correctly, so that the court can take your circumstances into account when they determine how you should pay off your debt. For example, if you can’t pay off the full amount, they may issue an Administration Order. If you simply ignore the letter, the court will still issue the judgement, but without taking your circumstances into account. For example, they might order you to pay back all the debt at once, even if it’s impossible for you to do so.

After you receive a claim form, you only have 14 days to respond. You will have to fill in the reply form, including an Income and Expenditure form. This will detail all your income and outgoings. The court needs this, so they know how much money you have to pay off the debt.

Your options are:

• File a defence if you think the amount you owe is incorrect. You can get advice on how to do this from a free debt advisor.
• You can admit to the claim, if you agree that you owe all the money outlined. If you do this, you will need to give the court details of your financial circumstances and make an offer of payment.
• If you need more than 14 days to prepare your defence, you can submit an acknowledgement of service.

A court can either issue a judgement whereby you pay off the debt over time, or where you have to pay the full amount immediately. If you’ve made a claim and a monthly offer of payment, you will probably be asked to pay in instalments.

But if you don’t respond to the CCJ, the court will still enter a judgement against you. However, you can ask the court to look at their judgement again if the repayments are more than you can afford. This is known as a redetermination.

If you don’t keep to the terms of your CCJ, your creditor can ask the court to enforce the debt. They can do this in several ways:

• Bailiff action: the court can issue a Warrant of Execution. This allows a bailiff the power to visit your home or business to take the money that you owe or seize valuable goods that can be sold to repay the debt. If this happens, you can ask the court to suspend the warrant and let you pay back the money at an affordable rate.
• Attachment of Earnings Order: this asks your employer to deduct the money that you owe from your wages.
• Charging Order: This can be issued if you own a property through a mortgage or outright. If you are issued with a Charging Order, you must pay back your debt or you’ll lose your property.

Unless you pay off a CCJ in full within 30 days of your court judgement, it will be put on your credit record, and remain there for six years. It would be entered on the Register of Judgements, which can seriously impact on whether you can get a mortgage, a credit card or even a bank account. So, it’s important you don’t ignore a CCJ or you could be refused credit in future.

If you’re struggling with your debt management and can’t keep up with payments, you should speak to a free debt adviser. They can help you to make an offer to your creditors, as well as explaining the other options that are available to you. Normally, you should be able to agree on an arrangement with your creditor where you make payments you can afford, thus avoiding court action.

Also, you should always strive to make your loan repayments on time and pay off debts early so you don’t rack up too much interest, to demonstrate to lenders that you’re a sensible borrower. If you’re using savings to pay off your debts, make sure you have enough cash in an easy access savings account for emergencies.