If you owe money to someone and refuse to pay, you might have a County Court judgment made against you. Equally, if someone owes you money, the same may happen to them.
These judgments can have serious consequences on your life, from damaging your credit score, to interest applied on the debt that can grow over time.
So what do you actually need to know about County Court judgments?
What Is A County Court Judgment?
When a person or business owes money and refuses to pay, the person owed the money can start a money claim. Money claims are a general name given to debt recovery. They come in 3 different categories: small claims, fast track claims and multi-track claims.
Most claims will fall into the small claims category, which covers claims for up to £10,000.
If you’re the debtor (the person being chased for money) and you don’t respond to the claim or refuse to pay, that’s when a judge will get involved. They will decide whether the claim is valid and make a judgment. If this judgment isn’t in your favour, the judge will issue a County Court judgment against you.
This means you’ll need to pay the outstanding debt.
To Use Or Not To Use Solicitors To Recover Debt
It’s relatively simple to make or defend against claims for less than £10,000. However, using a solicitor to recover this amount could end up with you paying more than the amount you recover.
For claims over £10,000, it’s almost always a good idea to get a debt recovery solicitor to help. The process gets much more complicated and your opponent will usually have legal representation. This means you’ll be at a disadvantage if you don’t too.
What If I Can’t Afford To Pay Off The Debt?
When the judge issues the County Court judgment, they’ll look at the debtor’s circumstances and what they can afford to pay. They might order the debtor to make immediate payment in full if they think it’s appropriate.
If not, they may set out a schedule of payments and dates. It’s important to stick to these dates as if you don’t, the case can be taken back to courts. This will incur even more cost and negatively affect your credit score.
If you don’t think you can meet the payment schedule, it’s vital that you raise this to the judge with a strong case as to why. You can’t simply not pay.
The judge might agree that you can’t afford to pay the debt. If this is the case, they might look to secure the debt instead. Securing the debt means the creditor (the person who lent the money) will use the value of something else you own in place of you paying the debt. This could be your home if you own it, a business or anything else of value.
Interest applies to any secured debts chargeable at 8% per annum, so it’s best to pay the debt if you can. The 8% interest can also apply to the original debt even if it’s unsecured. This means the outstanding debt can grow if you don’t pay it.
CCJs vs HCJs
If the debt in question is over £100,000, the claim normally goes to the High Court rather than the County Courts. If the judge makes a judgment against you there, they will issue a High Court judgment instead of a County Court judgment.
How To Pay A County Court Judgment?
Paying off a County Court judgment is relatively simple. You just need to pay the person or the business you owe, or set up a direct debit if paying in instalments. Always keep a record of any payments you’ve made towards a CCJ in case the creditor claims you haven’t paid.
You’ll also need to ask the creditor or their solicitor to apply to have the judgment removed one it’s been paid in full. It won’t be entirely removed from your record, but it will be marked as ‘satisfied’ meaning it’s paid.
How Long Does A County Court Judgment Last?
How long the CCJ stays around for depends on a number of factors. When a County Court judgment is first made it goes onto a public database known as the Register of Judgments, Orders and Fines.
If you can pay off the CCJ within 30 days of the judgment, you can ask for its removal from the register. Under these circumstances, your credit history won’t show any record of the CCJ, meaning lenders can’t use it against you.
However, normally CCJs stay on your credit history for 6 years, after which they are removed from public records whether they are paid or not.
Do I Have To Pay A CCJ After 6 Years?
You can decide not to pay a County Court judgment, but that doesn’t mean that it will simply vanish. Furthermore, just because a CCJ drops off your file after 6 years doesn’t mean it’s wiped from all records. The creditor can, and in most cases will, still pursue you for the debt.
You can also remove a County Court judgment by successfully appealing it, or by declaring yourself bankrupt. However, be mindful that the consequences of declaring bankruptcy can be much more severe than having a CCJ against you.
Can A County Court Judgment Be Made Against A Business?
Yes, it can. You can raise a claim against a business with outstanding debts provided your contract or agreement is with the business and not its Directors. This is because businesses are legal entities, much like individuals, and must pay any County Court judgments against them.
This can cause problems when it comes to enforcing payment of a CCJ by a business. Some industries are notorious for Directors closing down businesses when they have claims against them, which can force debts to be written off.
If you suspect this may be the case, it’s worth getting legal advice prior to raising the claim. You might be able to raise a claim against both any Directors personally and their business.
This means if the Directors wind the company down, you can still pursue the debt against the Directors themselves.
County Court judgments are a useful way of recovering unpaid debts. They can also severely affect your lending capacity if made against you.
If ever you are facing issues with a CCJ, or any serious debts, we can help connect you with an LGBT Lawyer to advise on your personal circumstances.