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What happens if I don’t pay a CCJ?

If a creditor has rightfully issued a County Court Judgement (CCJ) demanding you repay money you owe, you should pay it back within the allocated time. However, there are certain situations where you’ll have a legitimate reason for not repaying a CCJ.

Read more about County Court Judgements

I can’t afford to pay a CCJ

If your finances are in such a poor state that you’re unable to pay the amount specified in the judgement, or the payment plan becomes unaffordable, you should inform the relevant parties as soon as possible to avoid further action. Firstly, you should contact the creditor who filed the CCJ to explain your circumstances; you may be able to make an alternative arrangement.

You can download an N245 form from gov.uk, which allows you to request alterations to the payment plan. When filling this out, include details of your earnings and spending to support your case. You may have to pay the court a fee to do this, and it is at the court’s discretion whether they alter the payment plan to make it more affordable for you.

Read more on how to stop bailiff action

I can’t afford to dispute the CCJ

In most cases, if you feel you shouldn’t pay the CCJ, you should apply to the issuing court to get it removed or set aside.

Read more on removing and challenging a CCJ

However, disputing a CCJ will often involve court fees, and depending on your financial standing, you may not be able to afford these charges, or paying for them will worsen your situation. If you can’t afford the court fees to dispute a CCJ, you can contact us, and one of our consultants can discuss the potential options available to you.

What if the CCJ details are wrong?

If a CCJ has arrived at your premises but is not addressed to you, or anyone at that address, then you shouldn’t have to pay it to make it go away. The creditor may have sent the judgement to the wrong person, or the creditors are chasing an individual previously associated with your address. The debtor should have informed all relevant parties of their change of address before relocating. Even if this is the case, you should still contact the creditor to let them know it doesn’t apply to you to avoid further issues.

CCJs are not tied to addresses; they are bound to individuals.

Similarly, if you do owe a creditor money, but the amount specified in the CCJ is incorrect, you can appeal the decision by applying to have the judgement set aside.

If I don't pay a CCJ

What can creditors do if I don’t pay a CCJ?

As a CCJ is not a criminal offence, it cannot force you to repay any debt. However, creditors can send act as soon as the CCJ is issued. Whether they choose to is at their discretion.

Unless you apply for an insolvency procedure that includes the CCJ, your creditors are likely to send debt collectors, bailiffs or High Court Enforcement Officers. Alternatively, they may apply for an ‘attachment of earnings’, which will take part of your salary or benefits until your debt is repaid.

If they gain access to your home or business premises, bailiffs can take items equal to the value of your debt to be sold at auction. Each time bailiffs visit you, their costs are added to your debt. They can return multiple times unless you have a legitimate reason for not paying, or the courts agree to renegotiate your payment plan.

If you are visited, make sure they distinguish whether they are debt collectors or bailiffs, as this will determine what action they’re legally allowed to take.

If you wish to avoid serious action from your creditors, which could result in the winding-up of your company, or your home being repossessed, you should contact us for advice on what can be done to pay off your personal debt or allow your company to recover.

Read more on how a CCJ can affect you personally?

Will the CCJ go away if I wait six years?

If you don’t pay a CCJ within the time specified in the paperwork; usually 30 days, the CCJ will appear on your credit file for the next six years. As a CCJ cannot force you to repay any debts, it might seem tempting to wait for those six years to pass and the judgement to disappear. You can do this, but your creditors will keep chasing to retrieve their money as previously described.

In summary

If you can’t afford to repay your County Court Judgement (CCJ), or the creditors’ suggested payment plan is unsuitable for your circumstances, contact the creditor and attempt to modify the terms. If this isn’t possible, you should explore other debt-relief options as a method of repaying what you owe. Although CCJs cannot force you to repay your debts, if you don’t undergo formal procedures to set them aside or attempt to contact creditors, they can pursue further action to recover their money. Bailiffs may visit your premises and take items of equal value to what you owe, and their visits will only add to your debt.

How we can help

If a CCJ arrives at your business premises or personal address, don’t ignore it. While dealing with it may seem daunting, and can be a costly exercise, the consequences of not addressing the issue will be more damaging than going through the formal removal process. If you’re struggling to pay off a CCJ or can’t afford to challenge one you don’t owe, you should speak to us as soon as possible. Our consultants and insolvency practitioners have years of experience in the industry, and they can advise you on the best way forward for you or your business. All our advice is free and impartial, with no obligation.

Help for limited companies

If your company is suffering from either one or multiple CCJs, we can offer you a variety of solutions to suit your circumstances. If your core business is viable and with the potential to make a profit if it wasn’t suffering from its debt, your company could explore applying for a Company Voluntary Arrangement (CVA). These arrangements allow you to repay your creditors in monthly instalments based on what you can afford. If more substantial action is needed, you can explore options such as Administration, wherein a third party takes control of your company and makes the necessary changes to keep it operating.

More recovery options for limited companies

Help for individuals

As a sole trader, you can be far more vulnerable than in a limited company, where limited liability protects you and your personal finances. If you’re struggling with CCJs, either related to your sole trader business or your personal life, we can offer an Individual Voluntary Arrangement (IVA). Like a CVA, it allows you to consolidate your debt into monthly repayments over five years.

After the arrangement ends, all unpaid debt is written off, allowing you to make a fresh start free of your old liabilities.

More information on sole trader debt solutions

Authored by Lisa Hogg

Lisa Hogg

Director & Licensed Insolvency Practitioner