How Long Does a CCJ Last?

January 26, 2024 / Business Insolvency

A County Court Judgement, or CCJ, is an effective method of debt recovery available to creditors. It can be used when a company cannot, or will not, make repayments in accordance with a credit agreement. Creditors of such companies can apply for a CCJ, involving the courts in the debt collection process.

However, not all creditors can apply for a CCJ. There is an eligibility criteria that must be met, with one of the most important factors being time.

In this article, Clarke Bell will cover how long does a CCJ last, discuss the CCJ process as a whole, and look at how it can affect your company. We will also discuss how to deal with the debts of a company once and for all, with a process called a Creditors’ Voluntary Liquidation (CVL).

What is a CCJ?

A CCJ is a legal document that presents a strong option for creditors looking to recover a debt. It allows creditors to bring their case to the courts, and possibly rely on the court’s authority to compel a debtor to repay. If the court agrees with the claim, then a CCJ will be issued to the debtor.

Should a CCJ be submitted to a company, directors will receive a set of information regarding the particulars of their case. This will include the creditors that applied for a CCJ, owed amounts and relevant dates. At this stage, the company must either pay the amount specified, reach an agreement with creditors, or contest the CCJ in court.

Ignoring the CCJ should not be done, as it will likely result in further action being taken by creditors, and potentially result in legal penalties.

Applying for a CCJ

Creditors can apply for a CCJ, provided they meet specific eligibility criteria. First and foremost, a debtor must have violated their credit agreement in some way. This typically refers to companies that fall behind on payments due to cash flow problems. As this presents a breach of the agreement to make timely repayments, it entitles creditors to apply for a CCJ. In addition to this, the next essential requirement revolves around time.

Time restrictions for serving a CCJ

Although a breach of a credit agreement is critical to qualify for a CCJ, the time frame of an application is even more so. As specified in the Limitation Act 1980, creditors can only pursue a CCJ within six years of a court order. If a creditor receives approval from a court to act, but fails to do so within six years, then they must re-apply before taking any action. Taking enforcement action without the approval of the courts can result in legal consequences for creditors, even if the debt would be enforceable with court approval.

Effects of a CCJ on a company

A CCJ can have serious effects on a company.

Receiving a CCJ is an order for debt repayment or striking a new agreement with creditors. It will often add further strain to a company’s finances – sometimes making the company insolvent (i.e. unable to pay all of its debts). Ignoring a CCJ will have further, more severe consequences, and so should not be considered as an option.

Another effect is the potential damage to future business relationships. Information regarding a company’s CCJ is publicly accessible via the Register of Judgements, Orders, and Fines, for a small fee. This database contains most of the particulars regarding a company’s CCJ, including the total fee and how long it took to repay. This can cause parties, like future creditors and stock suppliers, to insist on certain terms in their contracts that may be unfavourable to your company. Some individuals and organisations may even refuse to work with your company outright if they see a CCJ on your company’s records.

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How long does a CCJ last on a company’s records?

Once on your record, a CCJ will be visible to the public for six years from the date of the judgement. However, there are ways for a CCJ to be removed from your company’s records.

Can a CCJ be removed from my company’s records?

Although a CCJ can be an issue for a company once added to its records, they are temporary and can be removed. Your options for removal will vary depending on your company’s circumstances, and are as follows:

  • If you have paid the debt the CCJ relates to within 4 weeks of the CCJ being issued, the company which placed the CCJ can have it removed, if you make such request to them.
  • If the liability was paid after 4 weeks of the CCJ being issued, you will need to apply to Court to have this removed. You can apply to Court yourself. However, you may prefer to seek legal assistance in this respect.
  • Six years have passed since the serving of the CCJ. At this point, the CCJ will be removed from your company’s records automatically.
  • Another entity, such as an insurance company, is responsible for the debt.
  • The CCJ had inaccurate information or was otherwise illegitimate, and you made a successful dispute. This will see the CCJ set aside, and will have it removed from your company’s records if it was already added.

Any of these methods will result in the removal of a CCJ from your company’s records. Note that in the case of a dispute, it is vital that you only consider this option if you have reason to believe the CCJ was filed improperly. Submitting a legal dispute without any valid reason to do so is likely to backfire, possibly resulting in additional problems for you and your company.

How to deal with the debts of a company once and for all

If your company cannot repay the debts associated with a CCJ, a common option is to place the company into Creditors’ Voluntary Liquidation (CVL). This is a formal insolvency procedure that helps financially struggling companies to deal with their debts and close down. This option enables directors to deal with the company debts and their legal obligations, and move on with their lives.

As a CVL is a voluntary form of liquidation, it entitles directors to appoint an insolvency practitioner (like Clarke Bell) to carry out the liquidation procedure.

For a more in-depth look at this option for dealing with your company’s debt problems, look at our CVL guide.

If your company has received a CCJ and cannot pay the debt, using the CVL procedure is often the best solution. By closing their company with a CVL, directors can stop the issue from spiralling, while ensuring both they and creditors reach the most favourable possible outcome.

Let Clarke Bell help you

If you have received a CCJ and you are unable to pay the debt it relates to, you need to take action now – before things get worse for you.

Clarke Bell have more than 29 years of experience in helping directors to find the best solutions to their company’s financial problems. We can do the same for you.

Contact us today for a free, no-obligation consultation.