The psychological effects of debt aren't just felt by those who hold the debt, they're often also felt by those...
I’m Being Threatened with a County Court Judgement (CCJ)
Being in debt is a cause of tremendous stress for thousands, not least because of the fear of action being taken by creditors. Worry about Personal Insolvency and in particular, being subject to a County Court Judgement (CCJ) can be tough to live with. But what does it mean when those to whom you owe money seek a County Court judgement against you and what should you do if you receive a notice that a CCJ is being sought?
What is a County Court Judgement?
A county court judgement (CCJ) is a decision made by a county court in respect of money owed which compels a debtor to repay their debt in a prescribed way and comes with the option of taking further action to enforce the decision should the creditor not comply.
In addition to forcing a debtor to repay a creditor, simply having a CCJ can make life for the creditor more difficult because it will be recorded on their credit file for 6 years and as such will make it more difficult for them to obtain credit and in some cases, it may adversely affect employment too.
How is a County Court Judgement be Sought?
A county court judgement isn’t something you’d receive ‘out of the blue’, it normally comes as a last resort after a creditor has tried several other means to recover the money they’re owed. If, however, debt remains unpaid and all other statutorily required means have been exhausted, creditors may apply to a county court to enforce action against a debtor.
The start of the process for obtaining a County Court Judgement involves the creditor sending a letter to the debtor warning that legal action is intended unless money owed is repaid. This letter will either be a ‘default notice’ or ‘letter before action’ depending on the type of debt. Receiving either of these letters indicates that court action is imminent as it is a requirement that creditors send a warning letter prior to initiating court action.
In order to prevent creditors proceeding with an application for a CCJ, debtors should take action immediately and usually have two weeks in which to respond and either repay the debt owed or come to an agreement with the creditor.
If no response is made within the allotted time then a judgement can still be issued against the debtor. A judgement once issued, also comes with a two week period during which the debtor can choose to challenge the claim or accept it. If the claim is admitted, the debtor will have to provide an offer of how they propose to repay the debt. Details of income and liabilities will have to be provided to support this offer. It’s then up to the creditor to either accept the offer and ask the court to draw up the order or reject it at which point the court will decide what it thinks is fair. From there, the debtor must repay based on the schedule either agreed by, or issued by the court.
Should the debtor insist that this amount is unaffordable, they have the option to ask the court to reconsider (a redetermination) by writing to the court and usually supplying extra evidence why it should change its mind.
What if you don’t pay after a County Court Judgment has been Issued?
A county court judgment is enforceable after it has been issued. if the debtor doesn’t keep to the terms of the judgement, or refuses to pay at all, there are a number of options available to the creditor, although they will once again have to apply to the court to have it enforced.
- Attachment of Earnings Order – If you’re in work earning a wage, this will take money directly out of your pay before you receive it.
- Seizure of goods – Bailifs can be sent to retrieve money or goods to the value of what is owed from your property.
- Charging order – If you’re a home owner, the debt can be secured against your home, which means you may lose it if you don’t pay
- Third party Debt order – Taking money that’s owed to you by another directly from your bank account.
My Creditors are seeking a County Court Judgement – What Can I do?
If you’ve received a warning letter, or believe you may soon receive one, it’s important to take action straight away. At Lines Henry, we offer a free consultation for people in all kinds of financial distress, so there’s no better time to pick up the phone, contact us and let us point you in the right direction.
Speak to us, we can help.