What is a CCJ and how does it impact me?

If you have a County Court Judgment (CCJ) registered against you because of an unpaid debt with Lowell, or if you've received letters which refer to potential legal action, you might be feeling worried, but we wanted to provide some information that may help.

We have created this easy guide to explain what a CCJ is, how it can impact you and how long it can remain on your credit file.

You could also seek independent legal advice from the Citizens Advice Bureau if you have any further questions.

What is a CCJ?

A CCJ (County Court Judgment) is a Court Order that is registered against someone who owes money to a creditor or a company that has purchased their debt.

If the company that owns the debt have attempted to contact the debtor repeatedly, but haven't had a response or reached a satisfactory resolution, they can instruct solicitors to issue court proceedings.

At this point, if you own the debt, you then become what's called a Defendant. You can respond to the County Court claim however you see fit. Should the debt remain unresolved, the solicitors can ask the County Court to enter a County Court Judgment. This is a CCJ.

If your debt is managed by Lowell and you're concerned that a CCJ could be entered against you, we're here to help. Get in touch with our supportive team and find out how we can work with you to manage your debt with a payment plan.

If you get in touch and start working with us on a payment plan and making payments, it may prevent your debt from being passed to a solicitor.

What happens once a CCJ is made?

If a CCJ (County Court Judgment) is entered against you, the CCJ will order you to pay the money back to the creditor or debt purchaser. The Judgment may include payment terms, which means the Court have ordered you to pay instalments over a period of time. You can still work with the solicitors to explore affordable payment options.

Once a CCJ has been entered, it will be recorded on a public register called The Register of Judgments, Orders and Fines which is maintained by Registry Trust. This information is then passed onto credit reference agencies who are responsible for recording this information on your credit file.

Because lenders use your credit file when they're deciding whether to lend you credit, a CCJ could have a negative effect on your ability to get credit in the future. But even if you have a CCJ on your credit file, there are things you can do to help reduce that negative impact. See our helpful blog on improving your credit score to find out more and see how we can help. 

How long does a CCJ stay on your credit file?

If you can pay your debt in full within one calendar month from the date that the CCJ (County Court Judgment) was entered, the CCJ will be cancelled and removed from your credit file.

After the calendar month, an unpaid CCJ will stay on your credit file for 6 years, after which it will be removed. If you pay the balance owed in full at any point during the 6 years of the CCJ being reported, the CCJ will be updated to show as having been satisfied.

Can Lowell obtain a CCJ against me?

In short; yes, but this action will only be taken as a last resort, so it is important that you engage with Lowell when we first get in touch with you. We would always prefer to work with you on your journey to becoming debt-free.

If Lowell has purchased your debt, we'll contact you to make you aware that we are here to help and support you in taking control of how you repay your debt. Lowell will try to get in touch with you by phone, text, email or letter depending on the details that we hold for you.

If we can't get in touch with you, or if you're unable to work with us, we may instruct our solicitors to act on our behalf. If you don't respond when our solicitors try to contact you, they'll send a letter telling you that you may start legal proceedings. If you don't get in touch after this, they may begin legal proceedings, which could result in a CCJ (County Court Judgment).

We've previously been asked 'is Lowell a CCJ?' and the answer to this is no. A CCJ is an order made by the Court at the request of our solicitors acting on our instructions.

Dealing with a CCJ

Lowell will always offer you the most affordable way to repay your debt, so it is important that you take the first step, and get in touch. By setting up a reasonable and fair payment plan, and maintaining payments as agreed, you don't have to worry about your debt ever reaching the point of legal action, which could result in a CCJ (County Court Judgment).

However, if a CCJ is entered against you, you should get in touch with our instructed solicitors who will work with you to find a way to settle your debt.

What happens if I don't pay a CCJ?

If you have a CCJ (County Court Judgment), you should take steps to try and pay the debt back. Ignoring a CCJ could lead to further legal action. This may result in enforcement action being taken, which could increase the amount which you owe if there are costs or fees associated with the action.

The most common methods of enforcement are:

• A Warrant of Control, which means a bailiff may visit to attend your property to collect the balance owed.
• An Attachment of Earnings, which means your employer could be ordered by the Court to deduct payments direct from your wages.
• A Charging Order could be obtained over any interest you own in a property.

If you have a CCJ and you're feeling worried or overwhelmed about it, don't ignore it. Instead, get in touch with the company who took the legal action which resulted in the CCJ to work out a solution with them.

Can I get a mortgage with a CCJ?

Obtaining a mortgage loan with a CCJ (County Court Judgment) can be difficult, as it will be displayed on your credit file and visible to lenders when they're making a decision about whether to grant you a mortgage loan. However, if you're working with the company that obtained the CCJ and actively making payments towards your debt, this may improve your chances of obtaining a mortgage loan.

The age of a CCJ may also have an effect, as its impact on your credit file may reduce over time. If you're able to set up a payment plan and pay your CCJ in full and have it marked as 'satisfied' then you may stand an even better chance of being approved for a mortgage loan.

It is always better to avoid a CCJ altogether, so if you have any concerns about your debt, get in touch and work with Lowell to settle your debt before any legal action is taken.

How to remove a CCJ from your credit file

If you can pay your debt in full within one calendar month from the date that the CCJ (County Court Judgment) was entered, the CCJ will be removed from your credit file.

If you're not able to pay your debt in full within a calendar month from the date that the CCJ was entered, you should still try to keep making payments if you can. You can work with the company that obtained the CCJ to find the most affordable way to do this.

Once your CCJ balance is repaid, the Court will notify Registry Trust who in turn will update the credit reference agencies. This won't remove the CCJ from being reported, but it will mean that anyone checking your credit history will see that it has been satisfied and that you have worked to pay off your debt. As a CCJ ages, it may become less important to your credit history.

This could make it more likely that you will be accepted for credit, even if the CCJ is still on your credit file, as it will be marked as satisfied.

You can also apply for a Certificate of Satisfaction as further evidence that you have satisfied your CCJ, by contacting your local County Court. There may be a small fee payable to the County Court for this service. 

If you're worried about a debt leading to a CCJ and impacting your credit report, Lowell can help you to get in control of your debt with a payment plan. We can offer support to find the right advice and help for you, and stop your debt from being passed onto solicitors for legal action.

It is never too late to engage and set up a fair and affordable repayment plan, whether a CCJ has been obtained or not. So, if we have been in touch, you can take action and start getting your debt under control by responding to Lowell or the instructed solicitors.

I have a CCJ but don't know who obtained it

The best way to get information about a CCJ (County Court Judgment) is from your credit file. If you've found a CCJ on your credit file, there will be a unique Court reference number (known as the Claim Number), which can be used to get more information from the County Court. It should also tell you the date that the CCJ was obtained and the total amount currently owned.

Can Lowell remove a CCJ?

Lowell can't directly remove a CCJ (County Court Judgment), as it is an order made by the Court. If you've already had a CCJ entered against you and our solicitors are in contact with you regarding the legal action, you should work with them to pay the CCJ balance. Paying the balance in full, will result in the CCJ being marked as satisfied, which may help you when applying for credit in the future.

If you're concerned about debt leading to a CCJ, Lowell is here to help and support you, no matter what your circumstances are. We can help to work out a payment plan that's affordable for you. For more independent financial advice, head to the Money Advice Service or StepChange. For more guides on handling debt, check out our Debt Management Hub.

First Published: 14th May, 2021