When a creditor is not paid they may seek to get a County Court Judgement (CCJ), issued from the Court. This can be against an individual or a company.
Receiving a CCJ can be quite damaging if it is not managed and dealt with correctly. The judgment needs to be removed from the company’s or your credit rating as soon as possible. If it is not removed, this will act as a barrier in the future, affecting you or your company in many ways, including when you wish to borrow money and when seeking employment opportunities. Therefore, this simple page indicates the three ways you can get a CCJ removed:
Pay the CCJ within a month
CCJs appear on credit records usually within just a few days of the judgment, however, if you act fast enough and the debt is paid within the month, in full, the judgment can be removed from the register. If the Court are aware of this, then they will act as if no register was issued in the first place. However, it is the responsibility of the creditor that has been paid to inform the Court – if they do not do this, then the Court will be none the wiser, and the CCJ will remain. A tip for you is to ask the creditor, once the debt is settled, if they have informed the Court – if not you can take action yourself and do so. Proof of Payment is required as is a £15 fee for the process.
If the CCJ is paid at a later date instead, you can get a certificate of satisfaction, classing the CCJ as satisfied on the public register – it has been paid, despite not being on time. However, the settled debt does not remove the CCJ, thus it remains on your credit record – the benefit being that it just makes it slightly easier to obtain credit. Unpaid CCJs are shown as unsatisfied, hence suggesting a poor credit record
Wait six years
From the date of the judgment, the CCJ remains on the register for a period of 6 years. Once the six years have passed, the judgment is automatically removed from your credit record – even if it is not paid.
This may sound appealing, letting the CCJ die out, but do you really want to have a poor credit rating behind you for six years? Consider the consequences, can you afford the risk?
Have the CCJ set aside
If the CCJ is a default judgment, i.e. the defendant does not acknowledge the claim or defend it, it can be set aside. If you reply to the claim, admit to the debt or attended the hearing for the issuing of the judgment, then this is not a default judgment. Another way to have the CCJ set aside is to show the Court that you have a good reason to defend the claim, i.e. the claim form may have never been received or was sent to the wrong address, meaning you missed the opportunity to pay the debt within the month. If there was a good reason for you not attending the hearing, the Court can set it aside. This automatically removes the CCJ from the public register, leaving its record non-existent. To do this, you must apply to the Court and do so quickly, as soon as it has been registered against you.
Why is it important to take action to remove the CCJ?
If you do not act to remove the CCJ, it could lead to a winding-up petition being ordered, for debts over £750. A winding-up petition freezes all the related bank accounts and negatively affects your reputation. If this is the case, seek turnaround advice from one of our expert advisers, who can help you and discuss options you can take to save yourself and your company.
If you have an affected credit rating from a CCJ, you can be hived down or hived across to a newly formed subsidiary. This will ‘wipe the slate clean’, though it is very complex and requires guidelines to be followed. You cannot breach transaction at undervalue. Therefore, it is recommended first to take removal action.