You’ve tried everything – the gentle email reminders, phone calls, letters, Statutory Demands/Letters of Claim, and followed the Pre-Action Protocol for Debt Claims. Still, nothing has elicited the much-needed payment/s from a particular debtor.
The question for you now is, “do you write off the payment or seek a County Court Judgment (CCJ)”? And if you plan to go down the CCJ route, how do you apply?
To help you decide whether a CCJ is the right way to recover your debt, we've outlined how they work and the application process.
How does a CCJ work?
A County Court Judgment (CCJ) is a court order demanding that a debtor must pay the money they owe for goods or services received from the creditor. Most businesses see a CCJ as a last resort, as the process is almost guaranteed to disintegrate your relationship with the debtor.
However, if you have tried everything else to no avail, it’s fair and reasonable that you are paid for your work and/or services. It's one of the actions creditors can take as part of the debt collection process.
Does a CCJ guarantee I will get paid?
Unfortunately not. However, possessing one shows that the court agrees you are owed the money. Having a CCJ also provides you with enforcement options which are detailed below.
How to issue a CCJ?
You or a solicitor can file a CCJ at the County Court, and you will need to pay a court fee. From this point forward, you will be known as the claimant. Once the CCJ is issued, the defendant will have 14 days to respond to the court.
Claims under £10,000 are usually heard in the Small Claims Court, meaning that legal costs are capped.
If your claim is for over £10,000, it’s essential to seek legal advice before considering a CCJ. It’s likely cheaper and quicker to explore alternative dispute resolution options, for example, negotiation and/or mediation.
An experienced commercial law solicitor can explain your options and advise on what action will best protect your interests.
How do I enforce a CCJ?
Securing a CCJ and getting paid are pretty different matters. If the defendant refuses to pay or ignores the CCJ, the court can take the following enforcement actions:
- Summon the defendant to court and ask for evidence concerning why they cannot/will not pay the debt
- Make an order deducting an amount from the defendant’s salary each month until the debt is paid
- If the defendant is a business, the court can demand they present their accounts and explain why the debt has not been paid
- The court can freeze the defendant’s bank account, building society, or business accounts and use monies from these accounts to pay the debt
- A charge can be made over the defendant’s property (this means that if the property is sold, the defendant must pay the amount before taking any money from the sale for themselves)
- Bailiffs can be dispatched to the defendant’s premises to recover the money owed
- A winding-up petition to close or ‘wind up’ the company can be made (if granted, the company’s assets will be sold, and any excess funds will be paid to creditors)
What is a bailiff?
A bailiff or enforcement agent is employed, appointed, or certified by the court to enforce writs or warrants, that is, to take control of a judgment debtor's goods and, if necessary, sell the goods to satisfy the debt.
If the debt owed is £600 or less, the County Court will issue a warrant of execution, giving the debtor seven days to pay the debt. If they fail to do it, bailiffs will be sent.
For debts over £600, the matter will go to the High Court, where the judge will consider issuing a Writ of Control.
If the Writ is granted, a High Court Enforcements Officer (HCEO) will send the debtor a Notice of Enforcement, giving them seven working days to complete the judgment.
If this does not occur, the HCEO will go to the debtor’s premises and ask for the debt to be paid immediately.
If the debtor refuses or cannot make full immediate payment on the judgment, the HCEO can seize tangible assets to be sold at auction. The sales money will be used to pay the debt owed.
Is a Notice of Enforcement a CCJ?
A Notice of Enforcement is a formal document that a creditor can issue to a debtor, giving a warning that it’s preparing to take action to recover money owed. At the same time, a County Court Judgment is a court order demanding that a debtor must pay the money they owe for goods or services received from the creditor.
Can CCJ payments be increased?
Although they can still take court action against the debtor, it's unlikely that the court will ask them to pay any more.
How long does County Court Judgement last?
A CCJ remains on the debtor’s record for six years. However, if they pay the debt in full within one month, the CCJ will be removed.
What does discharged mean on a CCJ?
A discharged CCJ is when it’s no longer classed as a judgment against the debtor, and it, therefore, won't show on their credit file. A CCJ discharge will only happen when the debtor has paid the CCJ off in full and within 30 days of receiving the judgment.
Get legal assistance from LawBite
Applying to the court for a CCJ is a serious step and should not be taken without legal advice.
Remember, you not only need to pay for the CCJ, but you will also need to cover the cost of any enforcement action.
A solicitor can inform you whether or not it’s in your best interests to apply for a CCJ or if another cheaper, less stressful debt recovery method would achieve a better result. To find out how LawBite can help you discuss by discussing your debt recovery options, book a free 15-minute consultation or call us on 020 3808 8314.