Phil MeekinView Profile
In 2016, there was a steep rise in County Court Judgements (CCJs) against consumers, figures from the Registry Trust revealed. The Registry Trust operates the Register of Judgements, Orders and Fines for England and Wales on behalf of the Ministry of Justice.
What is a CCJ?
Any creditor can apply for a CCJ; a court order will be filed against an individual or company that fails to repay money owed to the creditor. Figures hit record highs in 2016, with 912,389 judgements registered against consumers that year; a 24% increase on the 730,000+ judgements registered in 2015.
This rise is the fourth consecutive one, and the highest figure on record at the time. There are fears that this increase will have implications for people wanting to obtain mortgages, credit cards or even bank accounts in the future.
Removing a CCJ
A CCJ is removed from the register if it’s paid off in full within 30 days of the issuing date. If it is not dealt within this time, it will remain on the credit file of the individual or company for six years. After a judgement is received, it means the debt has been recognised by the courts.
If you’re unable to pay the CCJ, or you choose not to, then the creditor can instigate the next stage of the debt recovery process. Action they can take includes sending bailiffs, either to your home or business premises depending on which the debt is tied to.
If the amount owed is over £750, the creditor can apply for a winding-up petition. If the court approves, these will freeze your company’s bank accounts and can force compulsory liquidation. If the debt is personal, and you owe more than £5,000, your creditors can apply to make you bankrupt. Your credit rating will be severely damaged, and you could be forced to sell your assets.
Fewer CCJs for businesses
But this news comes in contrast to figures showing the number of CCJs against companies in England and Wales fell by 21% in 2016 to 78,739; the lowest level on record. This fall has been put down to new fees surrounding CCJs, which has seen businesses trying to obtain funds out of court to avoid this cost.
Whether the situation changes over the next couple of years due to Brexit remains to be seen. For now, businesses and individuals are at opposite ends of the spectrum.
Registry Trust chairman Malcolm Hurlston doesn’t agree with those that think the growing numbers suggest people are struggling to cope financially. He said; “Taking together the increasing number of judgements and their declining value, we see that people whose commitments may be out of control are being identified earlier in the lending cycle.”
Whatever this rise in CCJs against consumers means, it is worrying many experts and interested parties. Debt charities, especially, feel this points towards a potential increase of debt levels for many individuals, should inflation reach higher levels later this year as predicted.
The rise in County Court Judgements (CCJs) against individuals recorded its highest levels in 2016. By contrast, CCJs against businesses fell within the same period to the lowest recorded level. The source of the increase for individuals is debated; with some believing people are struggling to cope with their liabilities, while others cite earlier identification of those getting into debt being the reason. The fall in business CCJs is largely attributed to recently introduced fees for their issuing.
If you or your business has received a CCJ, it should never be ignored; further creditor pressure and debt collection action could follow. Speak to us for free, impartial advice with no obligation, and we will look at your circumstances and help you decide the best way forward.