From the UK: County Court Judgment’s: How They Are Issued and Resolving Them

An interesting study was recently conducted by OnePoll which showed that in the past five (5) years, almost one in 10 adults admitted to having a CCJ or County Court Judgment issued against them.

A CCJis where a creditor or someone you owe money to, takes you to court to have a judge issue a judgment order against you. The creditor has to show proof that you owe them money, and they request the judge to issue a CCJ.

This judgment order then affords the creditor more rights in trying to collect the debt owed to them through an enforcement order.

The CCJ is also recorded on your credit history. The only way to have the CCJ show as satisfied on your credit history is to either satisfy it by paying it in full, or settling it with the creditor. As with all items on your credit history, CCJ’s remain for six (6) years.

Once a CCJ is in place an enforcement order can be obtained. An enforcement order can allow the creditor to use bailiffs to come to your home to collect the debt, or the creditor can also get a wage attachment, having money taken out of your wages each month. A creditor can also look to obtain a Charging Order against any property you may have.

Once a CCJ is in place, if you were to enter into a debt management plan, the monthly payment for the CCJ is outside the debt management plan, meaning the CCJ cannot be included, but can be paid by the debt management company, however, it will need to be paid in accord with what the creditor is demanding. The payment will not be based on affordability. The CCJ gives the creditor the upper hand, and makes them a priority debt to be paid.

CCJ’s can be included in IVA’s/Individual Voluntary Arrangements and also in bankruptcy. This is due to the nature of these forms of insolvency that no creditor can be preferred. In addition, these forms of insolvency are handled by the courts and insolvency practitioners.

According to the research the figures show that more than four (4) million people in the UK had a court judgement issued against them in the past five years. Statistics from the study show that 9.4% had debts of £250 or less, 15.7% had debts of £5,000 or more and 8.8% had debts exceeding £10K.

It would appear that CCJ’s are being used more and more in the collection process of collecting a debt. Even for small amounts like £250 or less. One thing to consider here is if someone is struggling with repaying a loan, they should seek out professional help. The starting point is to discuss the issue with the bank or lender, and inquire what assistance they may be able to offer. If a person has multiple accounts and are struggling, looking at debt management options such as a debt management plan, IVA, or some form of insolvency may be the answer.

A Closer Look At Enforcement Orders

Having a County Court Judgment against you is one thing, basically it means that the courts have been shown you owe a debt and are acknowledging this by allowing a judgment to be placed against you and recorded on your credit. A CCJ alone does not pay back the debt or provide your creditor with any form of payment. In order for them to get their money they need to seek out an Enforcement Order.

Enforcement Orders are the ugly side of receiving a CCJ. This is where the creditor seeks to get what is owed to them, and some of the means they can do this can be harsh, and even a bit scary.

Bailiffs: Once an Enforcement Order has been obtained the creditor could use bailiffs to recover goods from your home to be sold to repay the debt. Having bailiffs show up at your door can be intimidating and embarrassing.

The first rule if bailiffs do show up is to NOT let them in. Only in specific instances can they force entry.

If you allow a bailiff entry, they can take an accounting of what possessions you have. If you do not adhere to the payment plan, if you set one up, on the second visit the bailiffs can force entry to take your things. 

It is always best to try and work out a payment plan or solution prior to the situation escalating to this level.

While bailiffs can take cars, stereos, TV’s, etc, they cannot take clothing, your stove or cooker, or your basic furnishings. They also cannot take tools of the trade.

Attachment of Earnings: This is where the creditor seeks to be repaid directly from your wages. You are allowed your basic living expenditures, but any surplus of excess can be taken to repay the debt.

A creditor cannot get an attachment of earnings if you are:

* Unemployed

* Self-employed

* In the military

You really lose control of the situation if an attachment is granted. Money being taken directly out of your pay can and will leave you with less to live on.

Again, it is best to avoid things reaching this level. Having monies deducted from your pay can make for a financially tight situation.

Charging Order: This is where the creditor has an order or lien placed against any property you may have thus securing the debt. Once a Charging Order is in place, the debt is secured and can no longer be included in an IVA or even bankruptcy.

If the creditor were to chose to, they could look to force the sale of the property in order to be paid. This is rare, and most courts would not allow this to occur. The Charging Order will remain in place until the property is sold, and then be paid out of any proceeds from the sale. 

There are other ways for Enforcement Orders to be executed, but the main three are those explained above.

CCJ’s and Your Credit 

CCJ’s stay on your credit history for a period of six (6) years. If the judgment is set aside or you pay the full amount within one (1) month, it can then be removed from your credit history.

It is a serious matter having a CCJ on your credit history. It shows not only that a debt went unpaid, but also to the extent a creditor had to go to try and collect that debt.

It can also be more costly to you, as charges and fees can be added onto the original loan balance.

Resolving a CCJ

The best way to deal with a CCJ is to avoid them completely, however this is not always easily done.

Once a CCJ is in place you can set-up a repayment schedule based on what you can afford, however the creditor who holds the CCJ is in a better position now that they have the judgment against you. This means they become more of a priority creditor.

If you have other debts and want to include them in a debt management plan, the creditor with the CCJ would need to receive payments of what they are asking for, not a token payment or a pro-rata payment.

If you were to look at forms of insolvency such as an IVA, Debt Relief Order, or bankruptcy, you can include any CCJ’s in these debt solutions.

,An interesting study was recently conducted by OnePoll which showed that in the past five (5) years, almost one in 10 adults admitted to having a CCJ or County Court Judgment issued against them. A

This article by Jon Emge was syndicated by the Personal Finance Syndication Network.