If you owe money you can’t or won’t repay, a County Court Judgement is a common tool creditors use to force your hand – but how long is a CCJ active for, and is there a time limit that means you won’t have to repay after a certain number of years?
In this blog we’ll examine what CCJs are, how they impact your credit rating, and whether a County Court Judgment can be enforced after 6 years from the date it was issued.
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What is a County Court Judgment (CCJ)?
County court judgments are court orders issued by your local county court. The main purpose of a CCJ is to compel you to repay an outstanding debt, whether that’s outstanding council tax debts or unpaid child maintenance.
By issuing a CCJ, the county court is effectively siding with your creditors and agreeing that they should be repaid the money owed.
You usually have to attend a court hearing if your creditors are pursuing a CCJ against you. If your creditors are successful, you will typically be notified by post and will then be given a set period of time to repay the money you owe.
How does a CCJ work?
Under the Consumer Credit Act of 1974, if you violate the terms of a credit agreement, creditors are entitled to take further action against you. A CCJ is a form of enforcement action that creditors may turn to if they haven’t been able to recover money from you.
If, for example, you have fallen into council tax arrears and the council haven’t been able to get you to repay, they can make an application to the county court for a CCJ to be taken out against you.
Both you and your creditors will be given a chance to state your case at a court hearing, after which the county court judge will make a decision. If they decide against you, the CCJ will be approved and you will be expected to repay your outstanding council tax debts in full.
If you receive a CCJ and still refuse to repay what you owe, your creditors may pursue further legal action against you, from having money taken directly from your bank account, to making an application that you should be forced into bankruptcy.
What impact does a CCJ have on the debtor’s credit record?
An active CCJ can have a profoundly negative impact on the debtor’s credit history because – like all court orders – every active CCJ is noted on a public register.
Once your CCJ is recorded on the register, it will be included on your credit file – a report that details every aspect of your financial history, including defaulted payments and unpaid debts.
Having a CCJ on your credit report indicates to lenders like banks and credit card companies that you have been unwilling or unable to repay your debts in the past, and therefore that you aren’t a trustworthy borrower.
This will be reflected in your credit score, which will be downgraded, making it more difficult for you to be accepted for new lines of credit, take out a loan, or get an affordable mortgage agreement.
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How long does a CCJ stay on your credit file?
In normal circumstances, a County Court Judgment will be included on your credit file for a period of six years from the date that it was first approved. During this time, your credit activities may be severely curtailed.
There are certain circumstances in which you can have a CCJ removed early. If you pay off a CCJ immediately after receiving it (usually within 30 days) it’s possible to make sure it’s never listed on your credit file in the first place.
CCJs and statute barred debt
Certain types of debt become unenforceable in the UK if a certain amount of time has passed without the creditor pursuing the debtor for payment. This is known as ‘statute barred debt’.
In England, Wales, and Northern Ireland, most debt becomes statute barred after six years. In Scotland, ‘statute barred’ debts are known as ‘prescribed’ debts, and the time limit is five years. Once that limitation period has passed, the debt in question is effectively written off.
Once a debt has a County Court Judgment attached to it, it can no longer be rendered unenforceable – the debt will have to either be repaid within 30 days (and wiped from the debtor’s credit record) or repaid after 30 days (and listed on their credit file for 6 years).
Can a CCJ be enforced after 6 years from the date it was issued?
According to the Limitation Act, a CCJ can only be enforced within 6 years of the order being issued. If you are being chased for defaulted mortgage repayments, for example, your mortgage company has 6 years to pursue you for payment of your CCJ.
After that 6 years has passed, the mortgage company forgoes the right to pursue for the money owed unless they apply to have the CCJ extended.
It’s possible for a CCJ to be extended if it is on the verge of expiry and the debt still hasn’t been recovered. For this to happen, your creditors would have to present the court with a strong case for why the debt wasn’t collected within the time limit, which makes a CCJ extension very difficult to achieve.
Where can I get advice if I owe money and I’m worried about CCJs?
If you owe money to creditors that you can’t afford to repay, you may be worried that they will pursue legal action against you, or even apply for a CCJ against your name. We can help.
At Your Debt Expert, we have decades of experience helping our clients navigate the debt collection process and protect themselves from creditors.
If you’re in need of sound financial advice or a helping hand from a debt specialist, reach out to Your Debt Expert today on 0800 082 8086.
