IF a County Court Judgement (CCJ) has landed through your letterbox, it can feel a little scary.
Getting one means that a court has formally decided you owe money – and has demanded that you pay the cash back.
A CCJ can be paid in manageable instalments, but if you don’t cough up, the bailiffs could come knocking.
Although the Government slapped a ban on home repossessions due to the Covid crisis, this is due to be lifted next month.
However, Citizens Advice has warned that CCJs could be on the rise as these protections start to unwind.
The charity said the number of people clicking through from Google into articles it has written on CCJs has doubled in recent weeks in its “Life Through Lockdown” report published this month.
It says the spike in searches “suggests that increasing numbers of people are having CCJs issued against them for the non-payment of debts”.
But what are CCJs and how does it affect your credit score? We explain all you need to know.
What is a CCJ?
You may get a CCJ if you owe someone money and a court has formally decided that you must pay the cash back.
When the judgement comes in the post, it will explain:
- how much you owe
- how to pay (whether in full or in installments)
- what the payment deadline is
- who you need to pay
If you haven’t received a letter or you’ve lost it, you can still find out if a CCJ has been made against you in two ways, according to Citizens Advice.
You can search on the Register of Judgements, Orders and Fines – but a single search will cost you £6.
You can also check by getting a copy of your credit report, which you can get from companies such as Experian, Equifax and Credit Compass.
What do I do if I’ve been issued a CCJ?
Before you receive a CCJ, a claim form will have been sent to you through the post.
This form tells you how much you owe, according to the person you owe money to.
If you agree that you owe the debt, then you’ll have to fill out a form called N9A.
In this form, you'll have to outline how you will pay the money back and when.
You have to send back this form within 14 days of it being issued to you.
Then, a CCJ will be issued to you from the court, and it will tell you what you have to pay in each instalment.
It’s likely that you’ll be able to claim in manageable chunks if you’ve admitted the claim and offered to pay off the debt, Money Advice Service says.
If you don’t send the claim form back within 14 days or ignore it, the court will order you to pay the whole debt in one lump sum.
If you pay your instalments late, you could also be taken back to court and ordered to pay extra costs on top.
What happens if I don’t keep to the terms of a CCJ?
If you don’t keep up with your repayments, it is possible that the bailiffs could come knocking.
As of January 31, bailiffs are allowed to knock on doors over debts for consumer goods and vehicles, although a ban remains in place for home repossessions until April 1.
Debt collectors: Know your rights
HERE are your rights, according to Citizens Advice:
- All bailiffs should send you a letter before they visit to check if you're vulnerable because of Covid-19.
- They must make sure they are social distancing if entering your home.
- If you're vulnerable or in financial hardship caused by the pandemic they must refer you to debt advisers.
If you think debt collectors have broken the rules, or acted aggressively by issuing threats, intimidation, offensive language, or repeatedly visiting, texting or calling you then you should complain to the organisation you owe money to.
Lorraine Charlton, debt expert at Citizens Advice, said: "Complaining won’t cancel your original debt, but it can give you a chance to deal with it in a way that suits you."
Bailiffs can enter your home and take goods from you as they have been appointed by courts.
However, they should still follow rules and procedures, including contacting you first and giving you the opportunity to pay what you owe.
In terms of timing, a bailiff can only visit you between 6am and 9pm, again unless they have a warrant allowing them to knock outside these hours.
StepChange recommends keeping your doors and windows locked.
It also says on the Gov.uk website that "you usually do not have to open your door to a bailiff or let them in".
Instead, you can ask them to put the paperwork through the letterbox or show it at a window.
You should try to keep your curtains drawn as much as possible so they can’t take photos of your valuables from outside.
Keep in mind, if you decide not to let a bailiff in, they could take things from outside your home like your car.
You could also end up owing more money if you don't arrange a way to pay your debts.
If you do let them in but don't pay, they may take some of your belongings.
Does getting a CCJ affect your credit record?
Your credit rating could be affected if a CCJ has been issued against you.
Citizens Advice says the CCJ will appear on your credit report, which is the information that is provided to the company you want to borrow money from.
So if you’re looking to apply for a mortgage and you have been issued with a CCJ, the lender will see this on your credit report – and it could impact their decision whether to give you the money or not.
A log of your CCJ will remain on the Register of Judgments, Orders and Fines for six years.
How to cut the cost of your debt
IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money
Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans
After this, your CCJ will be removed from this record, and credit reference agencies will be told to remove this from your credit record.
Although your credit record could be affected if you've been issued with a CCJ, you might still be able to secure a loan.
Metro Bank has launched two new mortgages where buyers with poor credit scores can buy a home as long as they put down a 20% deposit.
It will consider lending to people who have had a CCJ issued against their name, even if they haven’t repaid it yet.
The Sun has reported on Brits who have successfully clinched credit even though they have been issued with a CCJ.
Pub manager Simon O’Brien had a credit score “in shreds” but managed to turn his finances around in three years and now owns a £208,000 two-bed home.
When he was a student, he stopped paying rent to his landlord in protest over his shoddy accommodation conditions and was issued a CCJ in 2015.
However, teacher Sarah Arrowsmith was refused a mortgage for her dream first home because of a CCJ she was totally unaware of.
Covid debt is putting thousands of renters at risk of eviction, according to new research by debt charity StepChange.
The government promised £3.8million for a pilot programme to stop vulnerable Brits from falling further into debt.
Thousands of Brits will be left hundreds of pounds worse off due to a housing benefit freeze set to come in next month.
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