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Saturday, 9 October 2010

County court claims and County Court Judgments (CCJs)

If you get a letter telling you a county court claim has been issued saying you owe someone money, don't be alarmed. The court will decide whether you have a debt to pay - and if so, how you should repay it - in a way that's fair to everyone.

The purpose of a county court claim

Someone you owe money to (known as a 'creditor') can take a county court action against you to claim the money. If you pay the amount outstanding, you can avoid a judgment being made against you.

If you can’t pay the money in full, then you must fill in the court papers and return them within the time limit.

The court doesn't find anyone 'guilty' or 'innocent'. It looks at the facts and decides whether you owe any money, and if so, how you should repay it.

Under Scottish law, claims are dealt with differently, by the Sheriff Court.

County court claim form

The court will send you a 'claim form', showing how much the creditor says you owe them, and the details of the claim (though these details can be sent separately up to 14 days later). This form gives you the opportunity to explain your situation to the court.

Replying to a claim form

You'll receive an admission form with the claim form, asking you about your income and outgoings. On the form you can make an offer to repay the debt in instalments you can afford (or a lower amount if you think you owe less than the creditor claims).

If you don't make an offer on the form, or you make an offer that the creditor and court do not agree with, then the court may order you to either:

  • pay the full amount in one lump sum
  • pay the debt back in set monthly payments

You have 16 days from the date of the postmark to send the form back. You should send the form back to the creditor’s address on the claim form.

It is very important that you fill in the form and send it back within the time limit. If you don’t, the court will usually make an order for you to pay the whole debt back immediately. This is called a ‘forthwith’ judgment.

If this happens, you cannot apply for a redetermination (see below), you have to apply to pay the debt back in monthly payments. This is called an instalment order.

If you want to put in a defence, you should send an 'Acknowledgement of Service' or a 'defence form' to the court, depending on how you want to proceed. Follow the link below to find out more about these forms.

County Court Judgments (CCJs)

The court will issue an order saying you must repay the debt and how much to pay. This order is called a County Court Judgment (CCJ) and will either be for a payment amount agreed between you and your creditor or, if you can't agree, a payment set by the court.

Redeterminations

If you cannot afford what the court has decided you should pay, you can apply to the court to look at your offer again. This is called a 'redetermination'. There is no fee for this and you must do this within 14 days of getting the order.

You can apply by simply writing a letter to the county court. Quote your case number, attach your personal budget sheet, and explain why you disagree with the order the court has made.

If a district judge made the original order without a hearing, then the redetermination of your offer must be decided at a hearing.

If there is a hearing, the case will automatically be transferred to your local county court so that you can attend. The court will give you a hearing date.

If you have at least one CCJ and owe money to more than one creditor, the court can combine your debts and make an 'administration order' - saying you must make a single payment every month to be shared by all your creditors. You have to owe under £5,000 in total.

Who do you pay?

You pay the creditor who made the claim against you, or their solicitor or representative who will accept your payments on their behalf.

What to do if you can't pay

If you pay nothing, or don't keep up with the payments, the creditor can ask the court to take steps to make you pay, in which case you may have to pay more costs.

If you genuinely can't pay, you can ask the court to:

  • change the amount of the regular payments you are supposed to pay (known as an instalment order) - you can apply on a special court form called an N245
  • suspend the order until you can afford to pay - you can apply using application form called an N244

All of the forms can be found using the HM Court Service (HMCS) form finder.

County Court Judgment (CCJ) records

Unless you pay the full amount of the judgment within one month, your CCJ will be recorded on the Register of County Court Judgments for six years.

Organisations such as banks, building societies and loan companies use the registered information to help decide whether to give you credit or loans, like a mortgage.

What to do if you disagree with a CCJ

If you have a genuine reason to disagree with a CCJ, you can ask the court to remove the judgment ('set it aside'). You may have to pay a fee for this. If you don't have a genuine reason, your application could be treated as wasting court time or even perjury - serious offences that can incur fines and prison sentences.

If the judgment is set aside, things go back to the start of the claim. You have another chance to reply to the Claim Form and explain your situation. The CCJ is taken off the Register of Judgments, Orders and Fines until a new judgment is made.

Changing your credit record

Some companies charge for 'credit repair' services that claim to help you get CCJs taken off the register. Get free, independent advice first before using one of these companies. Credit repair companies must have a consumer credit licence from the Office of Fair Trading (OFT). Check that the company has a licence.

You can get incorrect information removed yourself by paying £2 to a credit reference agency to see your credit file and then asking for mistakes to be corrected.

Remember though, a judgment is only taken off the Register of Judgments, Orders and Fines if:

  • you paid it in full within one month
  • it's set aside by the court (see 'If you disagree with a CCJ' above)

You can search the Register of Judgments, Orders and Fines for any CCJ registered against you, and have it marked 'satisfied' if you've paid off the debt.

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