County Court Judgements Explained
Below is a MRR and PLR article in category Reference Education -> subcategory Legal.
Understanding County Court Judgments (CCJs)
Introduction
County Court Judgments (CCJs) can significantly affect your credit rating, making financial transactions more challenging. But what exactly are CCJs, and how can you address them?
What is a County Court Judgment?
A CCJ is issued when a creditor takes court action against you for failing to repay a debt. This judgment can severely impact your credit rating, reflecting significant repayment issues with a loan or credit.
The Process of Receiving a CCJ
If you fall behind on payments and cannot reach an agreement with your creditor, they might pursue a CCJ. You’ll first be notified by a 'Claim Form' sent through the mail by the county court. This form details the claim, including the creditor's identity and the amount owed.
If You Were Unaware of the Debt
If you discover a debt, perhaps because you've moved and lost touch with the creditor, paying it off immediately can halt proceedings. If you cannot repay the full debt, you must complete the 'Admissions Form.'
Completing the Admissions Form
This form requires information about your income and expenses and should be returned within 16 days of the postmark. If you intend to contest the claim, you can request an additional 14 days to prepare your defense.
The Hearing
Once you return the completed forms, a private hearing occurs. Attendance isn't necessary if your forms are thoroughly completed unless you wish to contest the claim. During the hearing, the court reviews the claim and your information, deciding how much is owed and the repayment process. It's crucial to understand that this isn't about guilt or innocence but resolving a financial dispute fairly.
After the Judgment
If the court upholds the claim, a CCJ is issued. You have one month from the hearing date to repay the debt in full to prevent the CCJ from being recorded. After this period, the CCJ appears on the Register of County Court Judgments and credit files, affecting your ability to secure future credit.
Impact on Credit
A CCJ on your credit file can severely restrict access to finance, as most lenders will be hesitant to offer credit. Once you clear the debt, the judgment is marked as 'satisfied,' which, while not removing it, is less damaging to your credit standing than an unpaid CCJ.
Removing a CCJ
Beware of companies claiming to remove CCJs; this is only possible in specific situations. If a CCJ was recorded by mistake after you paid within the one-month limit, you’re entitled to have it removed. Additionally, if there were errors in how the judgment was awarded, such as not receiving the Claim Form, you might apply to have it 'set aside,' which restarts the process. Attempting to obtain a 'set aside' without valid reasons can result in legal penalties.
Conclusion
Receiving a Claim Form can be unsettling, but a CCJ, while damaging to your credit, isn't a criminal matter. It won’t lead to severe actions like home repossession or bankruptcy. The goal of the CCJ procedure is to resolve debt issues fairly for both parties involved.
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