CCJs and your debt solution

If one or more of the debts included in your debt solution involved a CCJ, you may have some questions. How will a CCJ affect my credit rating? Will I still have a CCJ after my Debt Management Plan or IVA?

CCJs are increasingly common – a record 1.15 million were issued in 2019 – but many people still aren’t sure quite how they work. Read on to find out how a CCJ could affect you during and after your debt solution.

What is a CCJ?

When someone has an unsecured debt, for example on loans or credit cards, or on bills such as phone, gas or electricity and has defaulted on their repayments, their lender(s) or service providers may take court action by applying for a County Court Judgment (CCJ). This is a formal decision made by a court in England or Wales, instructing the person who owes money to make repayments.

In Scotland, the process is slightly different. Instead of a CCJ, they have something called a Court Decree. So unfortunately this article will only be useful to you if you live in England or Wales. But you can find out more about Court Decrees on the Scottish government’s website.

If you receive a CCJ it will remain on your credit file for six years, unless you are able to repay your debts in full within one month. Having a CCJ on your credit file can seriously damage your credit score and your ability to borrow money in the future.

What happens if a lender tries to get a CCJ against me?

It’s unlikely your lenders will take court action against you once you’ve started a Debt Management Plan (DMP). And if you have an IVA, your creditors are not allowed to take this action. Whichever debt solution you’re on, if you receive any court forms, or letters that say ‘notice of court action’, get in touch with us as soon as you can.

If you don’t have a debt solution at the moment, or you’re looking for advice for someone who doesn’t, you can find out more about CCJs on the Money Advice Service website.

How long will a CCJ affect me for?

CCJs usually stay on the public Register of Judgments, Orders and Fines – and on your credit report – for six years. The exceptions are if the CCJ is cancelled or set aside by the relevant court; or if you pay in full within a month.

If the amount is paid within a calendar month from the date the CCJ was issued, you can contact the relevant court with proof of payment. The CCJ will be removed from the public register, and the Registry Trust will notify the credit reference agencies to remove it from their files.

If you pay in full more than a calendar month after the CCJ was issued, you can apply to have the debt marked as ‘satisfied’. This doesn’t happen automatically: as above, you have to send in proof of payment to the relevant court. See the Registry Trust website for more details.

So will I still have a CCJ after my IVA or Debt Management Plan has finished?

Whether a CCJ still appears in your credit history after your debt solution depends on the solution you have, and how long it lasts.

It’s important to remember that any CCJs will fall off your credit file after six years from the date that you get them. So if your Debt Management Plan or IVA takes more than 6 years, any CCJs from before won’t show up there anymore.

If your Debt Management Plan lasts under six years, you should still be able to have any CCJs remaining on your credit report marked as ‘satisfied’, as above.

However, this usually won’t be the case with an IVA. A CCJ can only be marked as satisfied if it’s been paid in full; so unless your IVA has repaid 100p in the £ to all your debts – which is unusual – the CCJ will remain until the six-year mark.

Whether or not CCJs were made against you, your credit history will most likely need some intensive repair work after your debt solution. Check out our advice in this blog on rebuilding your credit score.

 

We hope this has helped you understand how CCJs can impact you. If you have any questions during your debt solution, please get in touch at any time.