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Here’s what you need to know about CCJs

Posted 24 January 2017

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What to do if a creditor starts legal action against you

Have you had a letter about a CCJ? If so, here’s what you need to know.

What’s a CCJ?

A CCJ is a County Court Judgement. If a creditor takes legal action to get a CCJ against you, this means that the court agrees you owe them money. It will tell you how and when you need to pay this back. If you live in Scotland, the equivalent of a CCJ is a Court Decree.

What can I do if a creditor starts legal action?

Your lenders won’t start legal action to get a CCJ just because you’ve missed a couple of payments – creditors treat them as a last resort.

If you miss three to six repayments, you’ll default on the account – this means the original agreement with the lender is broken. If your debt is covered by the Consumer Credit Act, the lender must send this letter to you before they start court action.

If you can repay what you owe in full before a deadline, you won't get a CCJ.

Or if you can’t afford your debt repayments anymore, speak to your lenders. Tell them that you’re struggling and you should be able to come to a new agreement so you can afford your payments again.

The most important thing is that you keep in contact with your lenders – that way, they know you want to sort your problems. They might be chasing you but they do want to help you sort it out. If you don’t feel able to do this yourself, seek expert debt advice.

What happens if I get a CCJ?

Don’t just ignore CCJs. If you do, your lenders can take further action against you. They might take money directly from your wages or benefits, or even send bailiffs round to your house.

Unless you pay the whole debt within a month, a CCJ will stay on your credit history for six years from the date you get it. This can affect whether or not you can get credit in the future.

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.