County Court Judgement (CCJ)
When loans go bad and are not paid in a timely manner, a lender will often make every effort to assist a borrower in any way they can. There are however some instances where the lender may feel they have no other option but to go through the courts in order to recover their money.
What is a county court judgement?
A county court judgement (CCJ) is where a court will make a decision over an unpaid debt. The lender will apply to the court stating they have been unable to collect monies owing to them and the court will rule how much is due, how much must be repaid and the frequency of repayments (typically monthly instalments with the amount based on the borrower's financial position).
Once granted by the court, the CCJ will be registered on the individual's credit record and will remain there until repaid and usually for a period of six years.
CCJs are hugely detrimental to a person's credit record as it shows a lack of ability to repay a loan. Many lenders (not just for mortgages) consider a previous CCJ to be a warning sign and may offer a loan at a higher rate to cover their risk or may even choose to decline a loan application altogether.
There are certain mortgage lenders that specialise in 'bad credit' mortgages although the number has reduced over recent years. These lenders may be able to provide a mortgage that most other lenders would normally decline and can help people specifically with CCJs, defaults, mortgage arrears, discharged bankruptcies and individuals with a poor credit score or bad credit rating by offering what is known as credit repair deals. These deals involve paying a higher interest rate than you would with a conventional lender, however, once payments have been maintained for a certain period (typically three years), your credit record will improve and you may then be in a better position to remortgage back to a conventional lender and take advantage of the more competitive interest rates.
How can I remove a CCJ from my file?
CCJ information is automatically removed after six years of the original judgement date. If you want a CCJ removed earlier, you firstly need to have a valid reason to have the judgement removed. You then fill in a form called N244 which is available free of charge from the county court, giving the reason you think that the CCJ should be removed.
After you send this form to the court, your application will be considered and if successful, you will then be able to write to the credit reference agencies giving a copy of the court's set-aside judgement, and they will then remove the CCJ from your records.
The courts only allow the removal of a judgement if:
- the judgement was paid within one month and a Certificate of Satisfaction has been issued
- the courts have 'set aside' the judgement - this is applicable if you believe the judgement was made in error
- an insurance company (related to the debt) is not paying the claim on time
How do I pay off a CCJ?
To pay off a CCJ, you will need to contact the individual or company to whom you owe the debt to make arrangements to pay. Once you have paid off the debt, ensure you receive a receipt or letter of confirmation of your payment which you can then forward to the county court. The county court will then issue a Certificate of Satisfaction to you for a small fee (usually £15 payable to HMCS).
How long do ccjs stay on a credit file?
Records of CCJs are retained for six years from the date of judgment. If you pay the judgment within one month of the original judgment date, and obtain a Certificate of Satisfaction from the Court, then all records of that judgment will be removed. If the judgment is paid in full after the first month and you obtain a Certificate of Satisfaction, the judgment will be marked as being satisfied and will remain on record for six years from the date of judgment.
Advice regarding ccjs
- You can obtain a copy of your credit record by contacting credit reference agencies such as Experian and Equifax. They is usually a small fee for this service (typically £3). They can also provide advice on how to improve your credit rating.
- If possible, always try to pay off a judgement within 1 month to ensure it is removed from you record entirely
Summary
- A county court judgement (CCJ) is where a court will make a decision over an unpaid debt
- CCJs are hugely detrimental to you credit rating and will make it much harder to obtain finance in the future
- There are many companies that cater for people with bad credit than can provide finance and help to improve your credit rating
For more information about 'County Court Judgements', you can call us on 020 8783 1337 or submit an online quote.
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