CCJs against consumers in the UK have risen drastically according to the latest statistics by Registry Trust. In the third quarter of 2017, 313,719 consumer county court judgments were registered in England and Wales representing a 24% increase compared to the same period last year.
What are CCJs?County court judgments are court orders in the UK (England, Wales & Northern Ireland) that are registered against individuals who fail to repay money they owe. ValueThe total value of Q3 2017 consumer county court judgments stands at £467,861,240 representing an 11% increase compared to the same period last year. The average value of a consumer CCJ has however dropped by 10% to £1,472. At its peak, in 2009, the value of a consumer CCJ was at £3,680. The value has been dropping ever since. The number of consumer high court judgments issued are however higher.
In Q3 2017 for instance, 45 judgments were issued against 17 during the same period last year. Collectively, the value of county and high court judgments is slightly lower (by 3.7%) compared to the same period last year. The value stands at £471,960,510 compared to £489,987,967 last year. The latest statistics show that the number of CCJs is increasing for the fifth consecutive year.
The new data suggests more people are struggling financially. A closer look at the decreasing value of a CCJ shows that people are having problems settling smaller loans now more than ever. Considering there is an increase in the number of judgments and a decline in their value, this can only mean that people are having a hard time repaying small or short term loans. According to Malcolm Hurlston, Registry Trust Chairman, the trend can also mean borrowers with plenty of commitments are being detected early in the lending cycle. Hurlston believes responsible lending practices are a leading cause of rising CCJ numbers. Impact of a CCJ to a consumerConsumers with a CCJ have a harder time accessing loans such as mortgages from mainstream providers. It gets harder for consumers with more than one CCJ. However, there are still lenders such as ”sub-prime” lenders who are catering to borrowers with CCJs.
How CCJs work
Receiving a CCJ claim: CCJ claims come in the form of a letter. If you happen to receive a claim, it is advisable to consult a debt advice service. CCJ claims come after creditors have sent default notices or warning letters. According to the Consumer Credit Act, a creditor must inform you of pending payments and the consequences of defaulting before they launch a CCJ claim. The Consumer Credit Act gives borrowers 14 days to act before a CCJ claim is launched. Individuals who have CCJs receive a letter or notice alongside a default information sheet.
Responding to a CCJ claim: It is advisable to solicit professional advice immediately preferably from a debt advice service the moment you receive a claim letter or notice. Seeking professional help is essential because it helps you avoid making a costly mistake. For instance, the court can consider your circumstances when deciding your fate (such as how you should pay the debt if you handle the claim correctly from the onset.)Ignoring the notice or letter only compounds your problems. For instance, the court can rule that you repay the debt at once which can be impossible leading to more problems. It’s worth noting that you can get free debt advice services, so you have no reason to mishandle a CCJ claim. You have 14 days to respond/reply to a CCJ claim. Simply fill in the reply form and send. The form requires personal information such as income and expenditures to show the court your current financial standing. When replying, you can admit the claim or agree that you owe money. In such an instance, you need to reply as described above. You can also file a defence if you don’t agree with the information in the claim, i.e., if the amount you owe is wrong. You need professional advice when filling a defence.
Lastly, you can reply to a CCJ claim by asking for more time. This option should be taken if you need more than 14 days to file a defence. This option acts as an acknowledgment that you have received a CCJ claim. Receiving the judgmentAfter responding to a CCJ claim, the court can issue two types of judgments. One, a judgment by installments which simply allows you to repay the debt in installments over a specified period of time. This type of judgment is highly likely if you agree to a claim and make a repayment offer in your reply. If you choose to ignore a CCJ claim, the court is most likely to issue a judgment forthwith requiring you to settle the debt immediately. You are free to request for a redetermination if you are not happy with the judgment. If you fail to adhere to the terms of the final judgment, i.e., you don’t pay up as instructed, the creditor can go back to court and request for a; changing order, attachment of earnings order or bailiff action order. A bailiff action order gives the creditor permission to visit your business or home to collect their debt or seize property/goods that can be sold to settle the debt. An attachment of earnings order gives the creditor the power to have their debt extracted from your wages. A charging order gives the creditor power to secure the debt against your property.
Can CCJs affect a person’s credit record? You must repay in full within a month (30 days) after receiving the judgment or risk having your credit record damaged for six years.