A CCJ, or County Court Judgement to give it its full name, is a type of court order that may be given to an individual who stops making a repayment on a debt that they owe. This kind of court order will be issued by a court when a creditor puts in a request to have a CCJ lodged against you.
There is a specific process that must be followed from that stage. You can choose to settle the debt that you owe before the CCJ is formally put into place if you wish at which point the action will be stopped. If you can’t or won’t do this then it will proceed.
If you don’t agree with what your creditor has said about you when they raise a CCJ you can make a counter claim in your defence. This will be considered by the court to see if you are in the right or not. If the court finds in your favour then the creditor may have to scrap that CCJ application.
During the CCJ process you can outline any personal circumstances that prevent you from repaying what you owe and a repayment schedule that you could manage if applicable. After a period of time the court will meet to make a judgement on whether to apply the County Court Judgement and, if it does, then it will set out how and when you should repay what you owe.
From this point, unless you repay all of your debt within a specific period (usually a month), the CCJ will be ‘on the record’. This means that it will appear on your credit history. This can have a negative effect on your chances of taking out new financial products in the future so trying not to get to this stage may be a good thing to do.
A CCJ will stay on a credit record for six years and could make it hard for you to get decent rates or even basic approval on various financial and credit products such as mortgages and loans as it will put you in a bad credit situation.
If you do end up with a CCJ then you can make it at least look better in credit history terms by paying off what you owe as soon as you can. This will then see the CCJ record marked as being paid off on your credit history although it will still be there.