A County Court Judgment (CCJ) is a Court Order stating that you must pay a debt that you owe. Once one is issued it could affect you in various ways.
Included in this article:
- What happens if you do not pay a CCJ?
- The affect on your Credit Rating
- Who will find out about the Judgment?
- How could a CCJ affect your Home?
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What happens if you do not pay a CCJ?
If you get a CCJ you are then required to pay the debt you owe. The Judgment may state you have to pay in full immediately. Alternatively you may be granted time to pay in instalments.
You should not ignore it. If you cannot afford to pay you can apply for a variation. Alternatively you should consider a debt solution such as an IVA.
If you do nothing the creditor can take further action against you. They may apply for an attachment of earnings or a charging order if you own a property.
If you are struggling with debt and get a CCJ an IVA is one of the debt management solutions you should consider.
The affect of a CCJ on your Credit Rating
Once a CCJ is issued it will be recorded on your credit file. This will seriously affect your credit rating and your ability to borrow in the future.
If anyone carries out a credit check against you they will see the Judgment on your file. This will almost certainly result in your application for credit being rejected.
The record will remain on your file for six years from the date of issue. As such your ability to get credit will be affected for this length of time. This is the case even if you repay the debt earlier.
Once the CCJ is issued even if you pay the debt in full the next day the record of the Judgment will remain on your credit file for the full 6 years.
Who will find out about your CCJ?
Very few people will actually find out that you have a CCJ. No-one is specifically told and it is not publicly advertised. Neither your mortgage lender or landlord will be informed.
In addition your employer will not told so your job should not be affected. However if your position depends on you maintaining a good credit rating and your employer does a credit check against you the Judgement will show.
A CCJ is a matter of public record. As such it will be recorded on a database called the Register of Judgments, Orders and Fines. This register can be accessed and searched on line.
Anyone who wants to search the Register of Judgments will be charged a fee. As such it is unlikely that someone will carry out a casual search and discover you have the Judgment.
How could a CCJ affect your Home?
If you are a home owner getting a CCJ will not affect your current mortgage. Your lender will not be told. However it will reduce your ability to get a new mortgage. This may be a serious issue if your current loan is coming to an end.
As a home owner it is important to understand that once a CCJ has been issued the creditor can then automatically apply for a Charging Order against your property. This would secure the debt against your home.
Most creditors do not apply for a Changing Order as soon as a Judgment is issued. However it is a risk. As such if you believe you have a CCJ you should get debt advice immediately.
If you rent your home a CCJ should not affect you as your landlord will not find out. However it could cause problems if you want to move because it will show up on a credit check. As a result a letting agent may not wish to deal with you.
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