What Happens if I Ignore a CCJ?

When you fail to repay a debt, creditors may take out a County Court Judgment (CCJ) against you to initiate the debt recovery process. So what happens if you ignore a CCJ?

While it is technically possible to ignore a CCJ, it is not a good idea.

In this guide, we’ll explain what happens if you don’t repay a CCJ, what actions creditors may take, and how you can go about paying off your debts.

Can I Ignore a CCJ?

A County Court Judgment is a court order which demands you repay an outstanding debt. It formally recognises the legitimacy of a debt and opens the door to further legal recovery action.

A CCJ will be resolved either when the amount is paid in full or once 6 years have passed since the initial judgment. Under the Limitation Act 1980, a CCJ can only be pursued for 6 years. After this time, the debt can no longer be pursued.

While this means it is technically possible to have the debt written off by simply waiting it out, ignoring a CCJ is not a good idea. Creditors can – and will – take action against you to recover what they’re owed.

How Should I Respond to a CCJ?

When it comes to County Court Judgments, it’s best to engage proactively throughout the process. Ignoring the problem can end up straddling you with some very unfavourable terms.

Before the CCJ is issued, your creditor must send you a Letter of Claim. This will detail how much you owe, along with some supportive evidence. You’ll usually be given 30 days to respond to this.

If you don’t respond at this point, court proceedings will go ahead. It’s a good idea to try and contact your creditor at this early stage. You can try and figure out an informal solution to save facing bigger problems down the line.

After this 30-day notice period, your creditor will be able to pursue County Court proceedings against you. You’ll then receive a Claim Form. At this point, you can:

Pay the amount in full
Dispute the claim (if it’s incorrect)
Propose to repay in instalments

Responding here is in your best interest. If you make a reasonable offer, the court will likely issue a ‘judgment by instalments’, allowing you to repay the debt over time in a series of fixed regular payments.

If you ignore the Claim Form, the court is liable to issue a ‘judgment forthwith’, meaning the full amount is immediately due for repayment.

What Happens if I Don’t Pay My CCJ?

Your creditor can initiate a variety of further legal debt recovery actions against you if you fail to make your County Court Judgment payments. The type of action your creditor may pursue depends on how much you owe.

Warrant of Control

A Warrant of Control allows creditors to send bailiffs to collect the outstanding debt. The creditor pays a court fee to do this, which will be added to the total of your debt.

Bailiffs will then either call you or visit your home so that they can inventory and ‘take control’ of your items as part of a Controlled Goods Agreement. If you fail to keep up with the payments, they can seize your belongings to sell at auction.

Attachment of Earnings Order

If you’re refusing to pay your debts, your creditor may get the court to issue an Attachment of Earnings Order against you. This allows payments towards your debt to be deducted directly from your wages.

You’ll have to complete an N56 form – or a ‘statement of means’ – to allow the court to figure out what amount should be deducted. The form covers your monthly income and your monthly expenditure. Failure to send this form back is a criminal offence.

Third-Party Debt Order

A Third Party Debt Order is similar to an Attachment of Earnings Order. It allows your creditor to take the money you owe directly from whoever is holding your money.

This typically involves taking the money from your bank or building society account. In some cases, your creditor may get your employer, pension or insurance provider to give them the money instead of you.

Charging Order

A Charging Order secures the debt against a property you own. If this debt is left unpaid, your creditor may secure an order for sale, allowing them to force the sale of your property.

Creditors can only apply for an order for sale if you owe over £1000. A forced sale will only be used as a last resort in the face of continued non-compliance.

Petition for Bankruptcy

If you owe over £5000, your creditor may petition the court to have you made bankrupt. This carries a range of serious consequences.

If the bankruptcy petition is successful, you’ll be forced to surrender all of your valuable assets – such as your home and your vehicles – so that they can be sold for the benefit of your creditors. You will become a registered bankrupt on your credit record, making it near-impossible to borrow money for the next 6 years.

What Can I Do if I Can’t Afford to Repay a CCJ?

While ignoring a CCJ isn’t a good idea, sometimes we can be left feeling like we have no choice – when left without the means to repay the CCJ, what other choice do you have?

Thankfully, there are quite a few options left available to you as a debtor.

Instalment Order

If you can’t afford to pay the amount outlined in your CCJ, you should try to get an Instalment Order issued by the court. This establishes a payment plan based on amounts that you can afford. You apply for an instalment order by completing form N245.

You’ll need to figure out your disposable income by calculating the costs of your essentials – food, bills, housing, transport, etc – so that you can make an offer. Make sure it is realistic. If it’s too high, you won’t be able to keep up with the payments, and you’ll find yourself back in hot water. If it’s too low, the court won’t agree to it.

If the court thinks you can’t afford a reasonable monthly instalment, they’ll record it as a ‘judgment forthwith’. This means that the whole amount you owe is due for immediate repayment. Your creditor may then take further action against you, although it may inform them that it won’t be cost-effective to do so.

Individual Voluntary Arrangement (IVA)

An Individual Voluntary Arrangement is a formal insolvency solution that allows you to deal with your debts while avoiding bankruptcy.

It is a 5-year repayment plan where you make one monthly instalment which is then divided up between all of your creditors. So long as you keep up with your instalments, you are protected from any legal debt recovery action.

You can include all kinds of secured debts. This includes CCJs.

However, it is better to do this sooner rather than later. Secured debts cannot be included in an IVA, meaning that if your creditor takes out a Charging Order, you will no longer be able to include the debt.

Speak to an Expert

If you’re struggling with a debt you cannot afford to repay, you should contact an insolvency practitioner as soon as possible.

Our expert team help people resolve their financial problems every day, so we understand how stressful it can be. However, it’s important not to bury your head in the sand. Tackling the issue head-on keeps your options open and prevents debt from spiralling out of control.

Get in touch to book a free consultation today.