Money Advice, Debt Advice & Debt Help
Can’t pay my CCJ – what can I do

Can’t pay my CCJ – what can I do

Can’t pay my CCJ – what can I do

If you get a CCJ you can’t pay do not ignore it. You must put a plan in place to manage it and prevent more serious action being taken against you.

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Apply to pay the CCJ with reduced payments

After a CCJ (County Court Judgment) has been issued you can still apply to pay the debt with reduced instalments. However rather than dealing with the creditor direct you will need to apply to the court for a variation of the Judgment using an N245 form.

You will have to give details of your income, living expenses and other debt payments. The Court will then review your financial situation and decide on a monthly payment amount which they believe you can afford. They can order that you make token payments of just £1 a month if this is all you have.

Remember, if you are allowed you to pay the debt with reduced payments you still have to repay it in full. The Court only has the power to dictate how much you have to pay each month. They cannot write off any of the debt for you.

Paying a CCJ based on reduced payments may mean it will take you a long time to repay what you owe.

Use an IVA or go Bankrupt

The CCJ may be just one of a number of debts you are struggling with. If you try to pay this then the others will suffer. In this situation an IVA (Individual Voluntary Arrangement) could help.

This would mean that you can reduce all your debt payments into a single affordable amount. Once in place the Arrangement overturns any CCJ that has been issued against you so you can stop paying it. It also gives legal protection to both you and your property preventing any of your creditors taking further action.

Where you have little or no surplus income to make any reasonable payment towards your CCJ you should consider the option of bankruptcy. The Judgment and any other unsecured debts will be written off. You will not have to make further payments towards them at all if you can’t afford to.

A Debt Management Plan is not a particularly useful if you have a CCJ. The debt can’t be automatically included in this type of debt solution.

What happens if you don’t pay your CCJ?

Ignoring a CCJ and hoping the debt will go away is not a good idea. If the Judgment is not paid then the creditor can take more serious action against you.

If you own a property the creditor can apply for a charge against it as soon as a CCJ has been issued. They do not have to wait for you to attempt to try and pay. If successful the debt will become secured. It will then be impossible to include it in an IVA or bankruptcy. It will have to be paid in full and may start incurring additional interest.

Where you live in rented accommodation the creditor can apply for an attachment of earnings. If granted money to pay the debt is taken directly from your wages. This is likely to cause you serious cash flow problems.

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