When you owe money to another person or organisation and you fall behind on the payments, they may decide to apply for court order against you. When you receive the court order, it is important that you do not ignore it, as an escalation could result in a County Court Judgement (CCJ) being awarded against your name. A court order will usually set a date by which you will be expected to have repaid your debt (in part or in full) and to whom you are expected to pay the amount (usually your creditor or their representative). In the case of a CCJ, if you do not pay-off the full balance within one month of receiving the order to do so, the judgement will stay on your file for 6 years.
Having a CCJ against you will make it very difficult for you to obtain important credit services, such as mortgages, credit cards, loans and home insurance. Ignoring a CCJ is the worst thing you can possibly do, as such action (or lack thereof) will probably do further damage to your credit record. Failure to meet payment deadlines is likely to result in your creditor returning to court to seek an enforcement order, where bailiffs are likely to be appointed to visit you at your home or place of business. Should you meet the one month payment deadline, your CCJ will be removed from the register. If you pay off the total balance after the one month deadline then the CCJ will stay on the register, but will be recorded as “satisfied”. Non-payment causes the CCJ to be recorded as “unsatisfied”.
Suffering a change of circumstance that leaves you unable to meet the terms set out in your CCJ will not automatically excuse you from your obligation to pay. Instead you will need to apply to change the terms at the County Court before you fall behind with your repayments. If you do not take action to change the terms, you will be at risk of losing your possessions and (in worst case scenarios) you may even lose your home. Evidence will need to be provided to support your application to change terms, proving your reduced income and demonstrating your expenditure on necessaries. If you state a figure that you can afford to pay and the other party agrees, then you must continue making payments at the reduced amount. If you cannot come to terms with your creditor, then the court will decide how much you should pay based on the information you have given them.
If, after having your CCJ terms changed, you find that you are still unable to meet the payments, then it is vital that you return to court as soon as possible. At this point another meeting between your creditor, yourself and a judge will be arranged to discuss what you will reasonably be able to afford. Applications for changes to terms may require you to fill out more forms and paperwork, and you are likely to incur additional court fees, but these are necessary evils if you want to minimise the repercussions. You may also be able to ask the court to freeze your CCJ until such a time as you can afford to repay it, though this will depend entirely on your situation and is decided at the judge’s discretion.
Getting specialist home insurance with a record of CCJs can be difficult, but it is not impossible. Many mainstream insurers are known to have declined home insurance for people with CCJs, but if you try to get it without informing your insurer of your CCJs then you are likely to have your home insurance claim rejected should you need to make one down the line. There are a small number of insurers who specialise in providing non-standard home insurance to people in difficult situations. You might need to do a little more research to find them, but it is worth the effort when compared to the alternative of going without insurance altogether.
