How do CCJs work and what happens when you get one?

A County Court Judgement (CCJ) is a court order issued against someone who fails to pay a debt.

Creditors can apply for a CCJ if we fall behind on payments or refuse to come to an agreement on settling a debt.

The court will give us an opportunity to explain how much we can afford to pay to avoid being told to pay the debt in one lump sum.

Ignoring a CCJ is dangerous as it can lead to enforcement action such as a visit from bailiffs or a charging order being put on our home.

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What are County Court Judgements?

County Court Judgements (CCJs) are court orders registered against someone who has failed to repay a debt they owe.

CCJs are issued in England, Wales and Northern Ireland. The process in Scotland is sometimes called "enforcing a debt by diligence".

If a creditor believes we won't repay the debt, they may apply for a CCJ to try and ensure the money is paid.

They're generally used to recover non-priority debts - like credit and store cards, unsecured loans, and money owed to catalogues.

They may be issued by a court, but almost everything involved in dealing with a CCJ is done by post.

One thing to note: if a debt is with a company regulated by the Consumer Credit Act, we must be sent a default notice and given two weeks to catch up with missed payments before the account defaults.

When are CCJs issued?

CCJs are not issued out of the blue.

There are processes creditors must follow to ensure they're following the rules and giving us time to respond to the debt.

Since I October 2017, creditors need to follow the "Pre-Action Protocol for Debt Claims" which essentially sets a time limit for both sides to come to an agreement before the creditor can push for a CCJ to be issued.

A creditor will first send a "letter of claim" by post (or other method if they have previously been asked not to contact us via post).

This letter will explain:

How much money is owed
Details of the agreement such as who it was with and the date it was made
If interest and other charges will continue to be issued
How the debt can be paid and what process should be followed to pay
If a debtor is already making regular payments, the letter must explain why a CCJ is being sought

The letter will also include details on how to contact the creditor and a reply form.

It's worth noting that, even if a creditor doesn't follow the protocol, that isn't a reason the debt can be avoid. It just means the debtor could challenge any costs put forward by the creditor - but the issue of the original debt will be settled separately.

Responding to a letter of claim

We have 30 days to reply to the form and return it to the creditor.

If we miss that deadline, they can start court action if they want to, meaning we can't avoid the issue if we want to try and come to an amicable solution.

The form can be used to:

Respond to the claim and say whether we believe we owe the debt or not
Make an offer of payment in instalments with evidence of income and expenditure
Inform the creditor we're seeking debt advice (they should wait an extra 30 days before starting court action if this is the case)
Ask for more information about the debt

If we're going to dispute the debt, it's important to get help with that to avoid saying anything during the claim that would count in the claimant's favour.

Find out more about where to get help with debt and what support is available.

At this stage, if we can come to an agreement with the creditor, we can avoid court action and pay off the debt as arranged.

If we breach that agreement or the creditor wants to start court action at a later date, they must issue another letter and the process starts again with 30 days to respond.

It's crucial to respond to the letter of claim because it's the last chance we have to talk directly to the creditor without the court involved.

County court claim form

If we're unable to pay or come to a final agreement with a creditor, they will apply to the county court for the judgment. The court then decides if there is a case.

A pack of forms will be sent by the county court:

N1 (Claim form)
N9 (Response pack)
N9A (Admission)
N9B (Defence and counterclaim)

We need to return either the N9A (admitting the debt) or N9B (disputing the debt) to the creditor within 14 days, usually by post but online responses are often an option.

If we can't meet the deadline because, for example, the pack didn't arrive until a few days before, we can apply for an extension.

Filling out these forms to the best of our abilities will ensure the court gets a full picture of our finances and/or defence.

For instance, providing details of our financial circumstances can help the court decide to issue a repayment plan rather than demanding the money be paid back in one lump sum immediately.

This is why responding to the county court form pack is in our best interests, even if we know we're going to struggle to repay the debt and would prefer to ignore it.

After the CCJ has been issued

The court will look at all the paperwork provided by both sides and could decide to issue:

A judgement saying we must pay the debt off in time
A judgement saying we must pay the debt off straight away

If we're permitted to repay in instalments, the information we provided in our response to the court will be used to decide how much we can afford to repay each month.

This means the CCJ is basically the new repayment schedule. It sets out how much we have to repay each month, and for how long.

If we seriously and genuinely disagree with the CCJ, we can apply for it to be set aside, for a fee of £255.

We need a strong reason - for example a mistake in the process that meant we received a default judgment when we'd filled in the admission forms requesting more time to pay.

Note: This doesn't stop us getting a CCJ; it simply restarts the whole process.

If it's more the case we don't think we can afford what the court has decided we should be paying, we should get back to them within 14 days requesting a "redetermination".

Failing to meet the terms

If we're unable to make payments, the creditor can return to court to ask for the order to be enforced.

There are a couple of ways this can be done:

Through bailiff action
By imposing a charging order
By imposing an attachment of earnings order

Any fees incurred from imposing and enforcing these actions will be added to the total amount of the debt, so it's worth avoiding them if at all possible.

Bailiff action

The court may issue a Warrant of Execution, giving county court bailiffs the power to visit your home to collect the money, or goods to that value.

Or it can transfer the issue to the High Court, resulting in their bailiffs - High Court Enforcement Officers - being granted the right to collect what you owe.

We've got more on what to do if you're threatened by bailiff action.

Charging order

As of 2012, creditors have been allowed to apply to have your debt secured against any property you own, using something known as a charging order.

A charging order can now be obtained even if we're up to date with our CCJ payments.

If the court is satisfied that you own, or part-own ("have an interest in") a property, it can issue an interim charging order, which means you can be stopped from selling up before your hearing.

Attachment of earnings order

A creditor can also apply to have the money taken directly from our wages, or freeze money in any bank accounts we have in order to service the debt.

This type of enforcement is only allowed in the following circumstances:

If we're behind with our CCJ payments
If we're an employee (so, not self-employed or solely on benefits)
If we owe more than £50 on the judgement

As well as any fees for the application of the order, we'll also be liable for £1 per wage deduction to cover the costs of our employer.

What happens after a CCJ?

Almost all CCJs are added to a public database, the Register of Judgments, Orders and Fines, within a month.

They'll also be visible on our credit reference files for six years.

But it's possible get a CCJ removed from the Register - if we pay off the debt in full within a month of the day of the judgment, or if we have the judgment set aside.

Otherwise, it's there for the foreseeable future. Companies offering to remove them are treading on seriously dubious ground.

What we can do, though, once we've paid off a debt, is to ensure it's marked as "satisfied". That way anyone checking our files will see we've had a CCJ, but that we've fully paid off what we owe.

There's more detail on how to access a credit report online to find out what's listed on there in our dedicated guide.

Summary: Don't ignore CCJ letters

Receiving letters about County Court Judgements can be stressful, especially if we're already struggling with our debt situation.

However, it's important to engage with the process and try to limit the damage by agreeing payment plans and sticking to agreements wherever possible.

Here are a few things to remember about CCJs:

The creditor will send a warning letter ahead of starting the actual CCJ proceedings to give us time to pay
Supplying as much information as possible about our financial situation will help the court decide on a sensible payment plan
If we fall behind on CCJ payments, enforcement action can include a visit by bailiffs to cover the value of the debt
Any fees from enforcement action will be added to the debt

Debt can be overwhelming, so it's important to seek help before it reaches a crisis point.

Thanks to the Breathing Space scheme introduced as a legal protection in 2021, we can now get 60 days respite from creditors while we get our finances in order and take debt advice from a professional organisation.

It's also vital that we understand our options and what's really going on with our debts. These guides have more information:

Debt is a personal issue but it's also part of a wider societal one as we explore in our guide to why we're borrowing and how we're managing our debts.