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Tackling your debts

The CCJ Process

Posted 16 December 2016

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Our no nonsense blog will explain how the CCJ process works.

The County Court Judgment (CCJ) process can seem complicated and confusing. In this blog, we’re going to explain exactly what a CCJ is and how it works. More importantly, we’re going to explain what you need to do if you’ve got a letter about a CCJ or you think that your creditor might try and get one.

What is a CCJ?

As we’ve said, CCJ stands for County Court Judgment and it’s a type of court order. If you haven’t paid a debt, or been able to come to a new arrangement with your creditor, they can go to the court and ask for a CCJ. If they’re successful in this, it means that the Court agrees you owe the money they’re asking for.

The court will tell you how much you owe and make it clear how and when you have to pay this back.

If you live in Scotland, the equivalent of a CCJ is called a Court Decree. Read our previous blog for information about this process.

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When will a creditor try and get a CCJ?

Exactly when a creditor will try to get a CCJ depends on their policy, however it is usually a last resort. They’ll try to contact you about the debt beforehand, and if the debt is covered by the Consumer Credit Act they have to send you a default letter by law before they’re allowed to start court action.

This means you should never get a CCJ out of the blue. If this does happen to you, it may be because you moved house and did not tell your creditors. They may have been trying to contact you at your old address and not received a response. This is why it’s important to keep your address updated with your creditors and to open letters as soon as you receive them.

How does the process work?

If your creditor starts court action, you’ll receive certain forms in the post. The forms you’ll receive are the N1 which is a claim form, N9 which is the response pack, N9A which outlines the amount that you owe, and N9B which is the defence and counterclaim form.

These forms have certain information on them, such as the name of the court (for CCJs this is usually Northampton County Court), your name, the creditor’s name and the claim number.

You will be able to find the specifics of your claim, such as how much you owe on the N1 form. If you agree that you owe the debt, you need to send back the N9A form. N9B is the form you need to complete and send back if you disagree with the creditor about the debt. If you want to dispute a CCJ, then our previous blog will help.

Make sure you send your forms back to the right place. If you agree with the amount, your forms need to go back to the creditor or their solicitor. If you’re disputing the CCJ, the form needs to go to the court. It’s also a good idea to send it back recorded delivery.

You have to send your form back within 14 days, although the court may allow a few extra days for the letter to reach you in the post. It’s very important to send them back as promptly as you can as, if you don’t, the court may order you to pay the money back at a rate that’s unaffordable for you.

After you’ve sent the form back

Once the court has received your form, they will work out how you have to pay the debt back, based on the information you provided. As long as you pay the money back as you have been to ordered to by the court, your creditor can’t take very much further action against you.

One of the things they are allowed to do however, is apply for a Charging Order, which secures the debt against your home (if you are a homeowner). Some debt solutions provide protection against a Charging Order being made, as long as the debt is still unsecured when the debt solution starts.

What if I can’t afford the payments?

If you didn’t manage to return the form in time, or your offer of payment is refused, your creditors can choose the rate at which you pay the debt back. They may ask for all the money in one go and this can mean you end up with CCJ payments you can’t afford.

However, you can still apply to the court to have the amount reduced. You can do this one of two ways: Redetermination or Variation.

Redetermination means asking the court to review the payments you’ve been told to make and change them. This is free, but you can only do this if you send your forms back on time and your creditor refuses your offer of payment, leading the court to determine what you should pay. You must apply for Redetermination within 16 days from the date on the CCJ judgement letter. You can do this by writing to the court and you should include a copy of your budget showing how much you can afford to pay.

Variation is the option to choose if you didn’t manage to send your forms back on time. Variation can be applied for at any time, but there is a court fee of £50. You apply by filling out a N245 form and sending it to the court. They send it to the creditor to see if they agree with the lower payments you’ve proposed. If they don’t agree, the court will look at your circumstances and decide on what they believe to be a fair payment.

How long does a CCJ last?

Once the CCJ has been granted, you continue to pay the amount it states until the debt is repaid in full.

A CCJ is be visible on credit history for six years from the date that you got it. This will mean that you find it more difficult to borrow money, obtain certain services, or that you have to borrow at a more expensive rate of interest.

How can I avoid getting a CCJ?

If you want to avoid getting a CCJ, the best thing you can do is keep in touch with your creditors and try to come to a new payment agreement with them.

In many cases, an unpaid debt only results in a CCJ because the creditor believes that you do not intend to pay the debt and have stopped responding to them. If you can’t pay your debts, call your creditors and explain the situation to them. Tell them why you’re having trouble and what you can afford each month. They may be able to reduce your payments for a while, give you a payment holiday or freeze the interest and charges on your debts.

There are plans that you can start to bring your repayments down to an affordable level, known as debt solutions. In some cases, debt solutions provide you with legal protection, so your creditors can’t take further action against you. Our advisors are available for you to talk to and can tell you whether there’s a debt solution that’s right for you. The sooner you get help with unmanageable debts the better – use any of the options at the bottom of the page to contact them today.

 

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.