Dealing with a CCJ

WHAT ARE THEY?

A County Court Judgment (CCJ) is a record of the fact that a creditor has demonstrated to a County Court that your company owes them a sum of money. The court will send you an Order stating the amount of the judgment debt, which can include interest and costs.

WHEN MIGHT YOU RECEIVE ONE?

If you have unsuccessfully defended or failed to respond to a claim, or were unaware a claim had been issued. This can happen where the claim is served on your registered offi ce and this is not your trading address, or either have recently changed.

HOW QUICKLY CAN THIS HAPPEN?

Once a claim is issued at the County Court, you have 14 days to acknowledge the claim form, and either admit all or part of the debt, or submit a defence. Acknowledging the claim within 14 days extends the period to serve a defence to 28 days.

If you dispute it, the court sets a timetable, which will take up a signifi cant amount of your management time. The court process could run for anything from several months to a year or more.

Not acknowledging the claim or failing to submit a defence enables the claimant to apply for judgment to be entered. You will not have notice and are only likely to become aware once the CCJ is registered.

IS THERE PRIOR COMMUNICATION?

Yes. Court rules require a creditor sends a letter of demand before issuing a claim.

WHAT WILL A CCJ INVOLVE?

The Judgment will be entered on a public Register of County Court Judgments. A creditor can choose how to enforce the judgment. This could involve a charging order on your property, bailiffs removing goods, money seized from your accounts or a petition to wind up your company.

HOW DO YOU DEAL WITH THEM?

Once you receive the judgment, if you were aware of the claim, and do not dispute the debt, you should pay it. If you are unable to pay the full sum, try to negotiate a lower sum with the judgment creditor. If you dispute the debt, but did not have the opportunity to defend it, you must immediately apply to the court to have the judgment set aside.

WHAT EFFECT WILL A CCJ HAVE?

Since the register is open to the public, anyone can see that your company has a CCJ. Having a CCJ registered against your company’s name will prevent or restrict your ability to obtain credit and affect your credit agency rating. It can also be damaging to your reputation in the marketplace.

HOW LONG WILL THIS CONTINUE?

If you pay the debt within one month of the judgment, and apply to court, the entry will be entirely wiped from the register. If you do not pay, and the judgment is not enforced, the entry stays on the register for six years. If you pay after one month and apply to court, the entry is marked as satisfi ed, but still remains on the Register for the full six years. If you can demonstrate to the court that the judgment was entered in error, it will be removed. Clare Gribben is a solicitor in the litigation department of Thomas Eggar, a leading South East law fi rm. www.thomaseggar.com