There are options to prevent or stop creditors from escalating to bailiff action when your company has received an unaffordable CCJ:

• Communicating with your creditor to prevent escalation
• Filing for a Stay of Execution to halt bailiff action temporarily
• Challenge the CCJ if applicable
• Consider insolvency procedures

You should explore all options available to a limited company when threatened with action. Unaffordable debt can indicate that a company is insolvent. If this is the case or you are unsure, you should seek advice from an insolvency practitioner like us to understand if a formal insolvency procedure is appropriate. Exploring this before bailiffs arrive is advisable, as the company’s position could worsen. If bailiffs do show up, you should know your rights and cooperate with them.

How a CCJ affects your company

A CCJ is the first legal step a creditor will take to collect the monies they’re owed. After having their debt recognised by the courts, they will have the option to send bailiffs before potentially filing for a winding-up petition. If you receive a winding-up petition, your company could face compulsory liquidation.

• A CCJ will stay on your company file for six years and will negatively affect its credit score, making it much more difficult to secure financial deals.
• Your relationship with suppliers could be tarnished by a CCJ.
• If unpaid, bailiffs could potentially take goods and assets from your business premises.
• A creditor will be able to wind-up your company from a resulting CCJ.

Bailiff action

Bailiffs have a very strict process which they must follow to retrieve debts. On their first visit, bailiffs are not permitted to enter your premises, unless you invite them in. They are only able to take things which belong to the business and must first write up a warrant of control.

Warrant of control

The courts will issue a Warrant of Control for debts below £5,000 or a Writ of Control for debts over if a CCJ remains unpaid. Both a Warrant and Writ of Control enable bailiff action. Here is what to expect if a warrant of control is issued against your business.

• A county court bailiff will visit you to try and take control of your possessions.
• You should be sent an enforcement notice which will give you seven days notice of their visit.
• After the warrant is issued, bailiffs have the right to try to take control of your goods. However, there will be a time limit on the warrant, which means that the bailiffs can’t take anything until this has been served.
• If you move your goods or give them to someone else, they still have the right to take them.
• The bailiffs cannot force entry and you do not have to let the bailiffs in. They can only force entry if:
  • You have previously let them into the premises.
  • They have already taken control of your goods and you have broken an agreement made with the bailiffs on their previous visit.
  • They have a Warrant or Writ of control.

Dealing with your CCJ

The circumstances surrounding your company will determine the course of action you should take. If a CCJ can be paid, that is the simplest solution to getting rid of it. However, if there are fundamental problems causing the CCJs to be issued, a formal procedure may be a better route forward.

Pay your CCJ

If feasible, the easiest option is to simply pay your CCJ. However, having the cash readily available is not always a possibility.

Unable to pay in full – Payment plan

If you’re unable to pay off a CCJ in full, there is still a formal repayment plan you can enter to avoid a winding-up petition. A Company Voluntary Arrangement (CVA) is a repayment plan which pools all of your debts together and, once approved by your creditors, allows affordable monthly instalments to be paid with any remaining liabilities written off after a period of time.

See more on CVAs

Other options to consider

If you cannot afford to pay a CCJ it could represent a much bigger problem within your business. If you’re unable to pay or come to a viable arrangement, a CCJ could see your company wound up at Court. This would mean you are unable to choose your own liquidator. Before this happens, we would suggest seeking advice about a Creditors Voluntary Liquidation (CVL), which would see the company liquidated. Seeking advice will give you the best head start to get things moving in the right direction.

In summary

CCJs are a serious action and represent the first legal step a creditor takes to get their debts repaid. It is an official court order, instructing you to pay. If you do not pay a CCJ, it can result in bailiff action and the repossession of assets. Bailiff power is limited, and they must follow a strict procedure when trying to claim goods. A seven-day notice must be served, notifying the company that bailiffs will be coming. On their first visit, bailiffs cannot claim any items but will make take notice of everything they can take. Bailiffs cannot take anything that doesn’t belong to a limited company.

How we can help

If you’re worried about CCJs or are concerned that you could be close to receiving one, acting fast is the first solution. The quicker you act, the more likely you are to come to a better solution for you and your company. We can help you work out the best solution for your business, whether it be a repayment plan or a liquidation. We offer free face-to-face consultations, operating nationwide.

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