County Court Judgments

County Court Judgments (CCJs) are made when a creditor takes you to court in order to retrieve the money you owe. If a CCJ is granted against you it is entered on the Register of Judgments, Orders and Fines (for England & Wales) and on your credit file. Unless you pay off the debt within one month of the CCJ being granted, it remains there for six years even if you pay off what you owe during that time

As you might imagine, a CCJ has quite an impact on your credit rating. You could find it difficult to borrow money at all and at the very least you're likely to have to pay higher interest rates.

CCJs can be marked as 'satisfied' if you pay off the debt during the six years but lenders will still know from your credit file that you had a CCJ awarded against you and will be wary of lending you money.

Once a creditor has obtained a CCJ - and if you fail to come to an arrangement to pay up - he can then ask the court to enforce the judgment. This will entitle him to either send in the bailiffs to seize your non-essential belongings so they can be sold to cover the debt; obtain an Attachment of Earnings Order compelling your employer to deduct payments from your salary; or obtain a Third Party Debt Order which freezes your bank account and ensures that any money you have is sent to the creditor.

More drastic is that they could opt for a Charging Order which prevents you from selling assets such as property, land or investments without paying what is owed to the creditor. If you don't sell, the creditor may apply to the court to force a sale to meet the debt. An even worse alternative is that they could apply to make you bankrupt if the sums you owe are large enough to make the expense worthwhile.

While all of the above sounds rather terrifying, remember that the law is there to protect you as well as your creditors. If you are able to make a realistic offer of regular payments at the time of the County Court Judgement hearing, it's likely the judge will simply make an order for you to pay that amount. And as long as you keep up with those payments, your creditor can't take enforcement action.