If you are unable to pay your County Court Judgment (CCJ), it can have serious consequences for your financial situation.
Firstly, failing to pay a CCJ can negatively impact your credit score, making it more difficult for you to obtain credit in the future. This can affect your ability to secure loans, mortgages, or even rent a property.
Moreover, the creditor may take further legal action to recover the debt, such as applying for a warrant of control, which allows bailiffs to seize your belongings and sell them to cover the outstanding amount.
In some cases, the creditor may also apply for an attachment of earnings order, which deducts money from your wages to repay the debt.
It is crucial to communicate with the creditor and explore alternative options, such as negotiating a repayment plan or seeking advice from debt management organisations, to avoid the potentially severe consequences of not paying a CCJ.
What if I don’t know to how to pay a CCJ?
Depending on your circumstances, there are many actions you can take if you have received a County Court judgement and don’t believe you can afford to pay it. Even if you are unable to pay it off immediately, you might be able to do it gradually.
Responding to the CCJ within the allotted time frame is crucial.
There are various ways to handle CCJs if you don’t think you can pay the judgement in full. There are two possibilities open to you:
- You can set up a CCJ payment plan to pay it off at a more manageable rate, and if you’re still having trouble making payments, you can apply to amend the conditions.
- You may request that the CCJ be’set aside’ or cancelled: If you believe that shouldn’t have occurred.
What happens if I don’t pay my CCJ?
If you ignore your CCJ, your creditor may start taking more aggressive enforcement measures. It is crucial that you respond to a CCJ within the timeframe specified for doing so.
These additional actions by your creditors could include of:
- sending enforcement personnel, commonly referred to as bailiffs, to your residence
- applying for a charge order on your property, which secures the debt against it and may result in seizure, if you own one
- Applying for an attachment of earnings order, which allows money to be deducted immediately from your wages.
Learn more about the repercussions of failing to pay a CCJ.
What happens if I don’t pay my CCJ?
If you are unable to pay the full amount, you must ask the court to permit you to make payments based on your ability to pay. You accomplish this by filling out the N245 form.
Share details about your income, including any benefits, and spending on the form.
Check out our instructions for filling out the N245 County Court judgement form.
How much should I offer in a CCJ payment plan?
The sum you ultimately choose to contribute will depend on your particular circumstances and your ability to make regular payments. Don’t offer more than you can afford to pay; otherwise, you risk falling behind or missing payments. Make sure your offer of payment is reasonable.
How to work out how much you can afford to pay
The amount of money you have each month that is considered “disposable income” is an excellent place to start.
After covering your necessary living expenses, what remains is your spare income. These comprise you:
- rent/mortgage,
- Council tax,
- food, and utility costs
- travel expenses
Include any payments made to “priority arrears” as well. You must make these payments since there will be more severe repercussions if you don’t.
You should make sure the CCJ and your other non-priority obligations are each receiving a fair portion of your disposable income.
Need assistance determining how much to pay? Utilise our online financial resources.
What if I don’t have any money left over to pay my CCJ?
You could make a symbolic offer of whatever you feel you can afford, no matter how modest, if you have no money left over after paying your primary obligations and debts.
The court will enter a “judgement forthwith” if it determines that you are unable to pay a monthly installment. This means your creditor has the option to pursue more action, however they might decide it is not financially feasible.
Your creditor may pursue additional legal action through bailiff or attachment of earnings orders, for example.
We wouldn’t advise writing “£0” or leaving the offer of payment part empty because the court will almost definitely issue a judgement right away.
You would undoubtedly benefit from some assistance with your finances if there isn’t any money left over to pay the CCJ. Find out how we can assist you by responding to a few short questions.
Can I change how much I pay towards a CCJ?
Most of the time, you can ask the court to rethink its decision, but you must move promptly.
If you are unable to make the payments (redetermination) or if your situation has changed (variation), you may ask the court to alter the terms.
Redetermination
If you can’t afford the payment terms, you can apply to have the terms changed by having a CCJ redetermined.
Using this procedure, you can request that the court reevaluate the CCJ payments you were ordered to make and modify them if necessary.
This is free to apply for, but it’s only accessible if the conditions below are satisfied:
- The judgement letter will state that the CCJ was a “judgement after determination.” This indicates that you promptly submitted your papers, the creditor rejected your offer, and the court issued a determination regarding the rate of payment.
- The court receives your request for a new ruling no later than 16 days from the CCJ judgement letter’s date of judgement.
You submit a request for redetermination to the court in writing along with a copy of your budget that details how much you can afford to pay. You can use one of our sample letters to accomplish this.
If a court officer made the decision regarding your initial CCJ payment, a District Judge will consider your application for redetermination and, typically without a hearing, determine what rate of payment is appropriate.
If a District Judge made the first CCJ payment decision, you will be required to appear at a hearing to determine the new rate of payment.
You cannot request a free redetermination if the District Judge who presided over the hearing that determined the initial CCJ payments. Due to the fact that most CCJs are resolved by court officers without a hearing, this doesn’t happen frequently.
Variation
If the payments are excessively expensive, this procedure requests the court to modify them.
If your circumstances change, you can request a variation at any time, but there is a £14 court charge.
The court form N245 must be completed in order to request a variation. You must complete this form, which is comparable to the N9A admittance form you received when your creditor initiated legal action, by providing information about your income, expenses for living, and debts, as well as an offer of payment.
- You submit the signed N245 form to the court along with your payment or documentation of your exemption from payment.
- To see if the creditor is okay with the revised installments, the court will send the N245 form to them.
- In the event that the creditor declines, the court will determine a fair payment. Typically, this won’t require a hearing.
Read our instructions for filling out the N245 form.
Can I get a CCJ removed?
In cases where a CCJ should not have been issued in the first place, you might be eligible to get it revoked. ‘Setting aside a CCJ’ is the term used to describe this.
If a CCJ is overturned, you are returned to the situation you were in just before the judgement was rendered. If you didn’t have a chance to do so when the forms were initially sent, you will now have a chance to present a defence against the CCJ.
A CCJ can often only be set aside if all of the following requirements are satisfied:
- For instance, the claim form was sent to an outdated address since you were unaware of the CCJ.
- You have a valid objection to the CCJ, such as the fact that you have previously paid off the debt.
- You take immediate action after learning about the CCJ.
Read more: Remove Judgment from credit file
Can’t afford to pay a county court judgment or CCJ?
If you can’t afford to pay a county court judgment as an individual, one option you can consider is applying for an Individual Voluntary Arrangement (IVA). An IVA is a legally binding agreement between you and your creditors that allows you to make affordable monthly payments towards your debts over a fixed period, usually five years.
It provides you with protection from further legal action, including county court judgments, and allows you to avoid bankruptcy. An IVA is suitable if you have a stable income and can make regular payments towards your debts. It enables you to manage your finances more effectively and provides a structured plan to repay your creditors while protecting your assets.
On the other hand, if you are a business and cannot afford to pay a county court judgment, one option to consider is liquidation. Liquidation, also known as winding-up, involves closing down the business and selling its assets to repay the debts owed to creditors. There are two types of liquidation: compulsory liquidation, which is initiated by creditors, and voluntary liquidation, which is initiated by the company itself.
Through liquidation, the business’s assets are distributed among the creditors, and any remaining debts are typically written off. While liquidation signifies the end of the business, it provides an opportunity for a fresh start and allows you to move on from the financial burden of the county court judgment. It is essential to consult with a licensed insolvency practitioner to navigate the liquidation process effectively and ensure compliance with legal requirements.
Frequently asked questions
If you Cannot afford to pay a CCJ this is what happens: If you can't afford to pay in full, you need to use ask the court to agree to you making payments based on what you can afford. You do this by completing the N245 form. Complete the form by sharing information about your income, including benefits, and spending.
If you can't pay a court order, the judgment is not paid by you or your lender, we will ask the court to enforce it. “Enforcing” judgment means that we will ask the courts to force you to pay the arrears. You will have to pay out legal costs if we enforce the CCJ against you. What happens if you Cannot afford to pay a CCJ?
What happens if you can't pay a court order?
Conclusion
In conclusion, if you find yourself unable to pay a county court judgment (CCJ), it’s crucial to explore your options and take proactive steps to resolve the situation. Whether you are an individual or a business, there are viable paths forward. For individuals, considering an Individual Voluntary Arrangement (IVA) can provide a structured repayment plan and protect you from further legal action.
On the other hand, if you are a business, liquidation might be the best course of action to settle debts and allow for a fresh start. Whatever your circumstances, it’s important to seek professional advice to understand the implications and choose the right solution for you.
Take action today by completing an online enquiry to connect with experts who can guide you through the process and help you regain control of your financial situation. Don’t let a CCJ burden you any longer; reach out for assistance and start working towards a brighter future.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.