What does a CCJ mean and what effect will it have on getting a loan?

If you receive notification of a County Court Judgment against you there are some steps you should carry out as soon as possible.

Issuing County Court Judgements is a very common court procedure, so receiving one does not make you unusual, but you should comply with it otherwise there could be serious and lasting consequences for you.

The first thing to do is to check that the Judgment amount, parties and date correctly records the debt owed.

If you’re satisfied with the Judgement detail and you can, you should pay the Judgement amount in full, and make sure you do so within 28 days of the Judgement date. Failure to comply in this timescale will result in the CCJ being registered with the Register of County Court Judgments, Credit Reference Agencies will receive and record the details of the CCJ against your file. So you can see that having a CCJ registered against you with a Credit Reference Agency does not mean that the courts have found against you, but they have found against you and you have failed to pay the sum owed within 28 days of the Judgement. Many loan providers take a very negative view of this failure or refusal to pay, and accept it alone as enough information to decline a secured or unsecured loan application.

What happens if your circumstances are such that you can't pay the Judgement amount in full within 28 days but are able later? When you do comply and pay off the debt you should ask the courts to note that the Judgment has been satisfied. Failure to satisfy the Judgement within 28 days will result in the CCJ remaining on your file for six years whether it is subsequently satisfied or not, but CCJ loan companies you may apply to will be able to see if you have paid the debt.

If want the other party to consider installments, you can ask the courts to "vary" the order against you by completing a form N245 if you can't pay the total amount specified. This form can be obtained from the court. You will be asked for information about regular income and expenditure. There is a £30 court fee for submitting this request.

Amending an entry on the Register of County Court Judgments

It is possible for a Judgment to be set aside or reversed if, for example, you appeal and that appeal is successful or because it has been paid within 28 days, in these circumstances the entry in the Register of County Court Judgments will automatically be removed by the court. In these circumstances the Registry Trust must be sent notification of cancellation by court within three days of the date of the order. The entry at the Register and from the credit reference agencies should be removed within three to four weeks.

If you clear the judgement amount after the 28 days then you can request that the Registry entry be amended to reflect the fact that you have paid the debt. This does not remove the entry, it only marks it as paid or "satisfied". Whether or not a Judgment has been paid it will remain on your file for six years. During the time your file records the CCJ, loan companies will take it into account when considering your applicationfor a personal loan, after that time the records are deleted.

In England and Wales, a Certificate of Satisfaction, stating that the debt has been paid, can be obtained from the County Court in which the case was heard. The fee is £10. If the debt was not paid through the court, for example, it was paid direct to the lender, the court will require evidence that the Judgment has been satisfied, i.e. paid. The court will need the case number of the action. The number and the name of the court are shown on the Register of County Court Judgments, under your name, and on your credit reference file. The court will then issue a Certificate of Satisfaction to you and automatically inform the Registry Trust that the debt has been paid. There is no statutory time limit within which the court must do this.

For further information and assistance contact your local Citizens Advice Bureau