What Is The CCJ Process?

December 14, 2023 / Business Insolvency

Companies who have financial issues and are struggling to repay their bills are likely to face pressure from their creditors (i.e. the people and companies they owe money to). If no solution is reached, these creditors are likely to utilise certain debt recovery methods, ranging from attempts at communication to hiring debt collectors. Should these debt recovery attempts fail, creditors are likely to escalate things in an attempt to get their money. One of the first steps in this escalation is a County Court Judgment (CCJ).

A County Court Judgment can be applied for by creditors who have seen previous attempts at debt collection fail. A CCJ issues a formal demand for repayment to a company, which must either adhere to this demand, or risk further escalation. If you have received a CCJ for your company’s debt, you might be asking – what is the CCJ process, and what can I do about it?

In this article, Clarke Bell will answer these two questions and cover your options for responding to a CCJ (including putting your insolvent company into liquidation to deal with its debts once and for all).

What is a CCJ?

A County Court Judgment is a document that orders a debtor to make a full repayment of a debt. A court typically issues a CCJ on behalf of a creditor who has made several fruitless attempts at debt recovery. By applying for a CCJ, a creditor can utilise the authority of the courts to compel their debtor to repay, or to use a refusal as grounds to take further action. A winding-up petition, for example, could be used if a company cannot, or will not, adhere to a CCJ.

Applying for a CCJ

Creditors may apply for a CCJ if their debtor has failed to keep up with monthly repayments, and the situation has not been resolved through other means. Creditors must meet certain eligibility criteria, however. Before applying, creditors must know the precise sum they want to claim, the outstanding value must be below £10,000 if the claimant requires financial assistance with court fees, and the value must be below £100,000 overall. Assuming your debt meets these criteria, then your creditors can apply for a CCJ.

A CCJ application can be submitted either online or by post. Both applications require the debtor’s name, the company headquarters location, and contact information for both the applicant and the debtor. Additional information surrounding the specifics of the case will also be required. Once all data is included, applicants require a means of payment for court fees before submitting the application. Creditors applying using a paper document must complete the N1 form, then send it with an accompanying cheque to the Civil National Business Centre.

Receiving a CCJ

If one of your creditors has made a successful CCJ application, you will receive a document detailing the specifics of your case. This includes vital information that you need to formulate a proper response. This includes the following:

  • Your case’s claim number, which will be used during communications with various parties.
  • Date of issue, which will be used as the reference point for various timeframes.
  • The name of your claimant.
  • Your company’s details. You should ensure these details are completely accurate, as even minor errors can be grounds for appealing to the courts to have the CCJ set aside.
  • The details of the court handling your case. Any court-related communications should be made to this address.
  • An address for sending documents and payments, which is usually the address for the claimant’s solicitor. In some cases, your creditor will not include an address. It should be assumed that the creditor wishes you to contact them directly, though it can be a good idea to clarify this.
  • The reasons behind the serving of a CCJ.
  • Amounts payable, along with any costs and legal fees.

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How long does a CCJ last?

County Court Judgments essentially have two timeframes: a thirty-day timeframe and a six-year timeframe. If a full repayment is made within thirty days, the CCJ will not be registered against your company. This effectively keeps it off the public record, ensuring future creditors and business partners don’t catch wind of your CCJ.

If a full repayment cannot be made during the thirty-day window, creditors can take this as evidence that your company is insolvent. This evidence can then be used to legitimise further action, such as a winding-up petition. However, repayments can still be made during this timeframe, and agreements can be struck. Provided you keep to your end of the bargain, creditors are highly unlikely to escalate the situation.

Responding to a CCJ

Once you receive a CCJ order, fast action is essential. Leaving a CCJ unchecked can easily lead to creditors losing faith in any attempts at negotiation, instead causing a turn to more forceful methods of debt recovery. Upon receiving a CCJ, you should consider the following responses:

  • Make a full repayment within the thirty-day timeframe.
  • Enter into a repayment agreement with your creditor. This can take the form of a Company Voluntary Arrangement, if necessary.
  • Enlist the help of a licensed insolvency practitioner (like Clarke Bell) to explore a business rescue plan. If this is not an option then an insolvency practitioner can implement other insolvency procedures, such as Creditors’ Voluntary Liquidation (CVL).
  • Find alternative forms of finance, such as invoice financing, to quickly raise funds for a swift repayment.
  • Dispute the CCJ and have it set aside.

Can a CCJ be removed?

If you believe your creditor has submitted a CCJ in error, you may have grounds to appeal to the courts to have it set aside. An appeal to have a CCJ set aside can be made for several reasons, but there must be a valid justification behind the claim. Appealing without proper cause will not be viewed positively, and can result in negative consequences for directors.

When appealing to have your CCJ set aside, a range of justifications can be given. In general, a CCJ can be set aside if any of the information is incorrect, or creditors have not followed the proper procedure. If you can prove that the CCJ information is incorrect, such as an incorrect sum, address, or even debtor, then you can appeal to have it set aside. Similarly, if you can prove that your creditor did not follow procedure, making no attempt to contact you or recover the debt through other means, then it may be possible to have the CCJ set aside.

Let Clarke Bell help

Receiving a CCJ can be stressful, especially if your company is experiencing financial problems.

If you have received a CCJ, and you think the best option for your insolvent company is a Creditors’ Voluntary Liquidation (CVL), we can help you.

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

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