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As a business, unpaid invoices can cause a raft of issues, such as cash flow problems that can make it difficult for you to pay your own bills or make payroll. If you have tried late payment demands and followed the appropriate pre-action protocol for debt recovery, but have been unsuccessful, the next stage is to take further legal action against the debtor. While most debt recovery cases are resolved well before this stage, sometimes unpaid invoices legal action is the only option for a business trying to get back the money they are owed and legally entitled to. A brief summary of how to get a CCJ is outlined below.
If you have sent your letter before action or letter of claim, depending on whether the debtor is another company or an individual, and no payment is forthcoming before the deadline set out, you can then issue a formal legal claim for the money owed to you. You can also include any interest on the unpaid invoice that is owed to you in the debt claim. Once the court fee is paid, your claim can be issued.
The debtor will be notified of the claim and given a set period of time within which to pay the outstanding sum, offer a repayment proposal, accept or partially accept, or defend the claim. If they fail to respond within the deadline or repayment terms are not agreed, you can request the issuing of a CCJ.
For more information about debt recovery or how to issue a CCJ, the expert team at Stephensons can help. Call us today on 0161 696 6170.
A County Court Judgment (CCJ) is a Court order issued against a debtor if they fail to make payments of their debts. Obtaining a CCJ typically involves submitting a claim through the online Money Claim Online (MCOL) service.
If a debtor ignores a CCJ and does not make the required payment, further enforcement actions may be taken by the creditor. Such enforcement measures can include instructing bailiffs, applying for an attachment of earnings order, or placing a charging order against the debtor’s property.
The process to obtain a CCJ typically takes about six to eight weeks, assuming the debtor does not defend the claim. After submitting your claim, the debtor has 14 days to respond to the court. If the debtor acknowledges the claim, they are permitted an additional 14 days, totalling 28 days to file their defence. If the debtor does not respond to the claim within 14 days, then a CCJ can be requested by default.
The cost of obtaining a CCJ depends on the amount you are claiming. As an example, the Court Fee to issue a claim of up to £300 is £35. The Court Fees work on an ascending scale depending upon the value of the Debt. Higher value claims will have correspondingly higher court fees, and additional enforcement options, if required, will incur extra charges.
Once a CCJ is issued, the debtor is usually given a set period—often 14 days—to pay the outstanding debt. If payment is not made within that time, the creditor can then apply to enforce the judgment through court-approved methods, such as using bailiffs, obtaining an attachment of earnings order, or placing a charge on the debtor’s property.
A CCJ remains on your credit record for six years from the date of judgment, negatively impacting your credit rating. To remove the CCJ sooner, you must pay the debt in full within 30 days from the judgment date, after which it will be removed completely from your record. If payment is made after 30 days, the CCJ is marked as 'satisfied' but will remain visible for six years.
Yes, a CCJ can have a negative effect on your credit rating. It will remain visible to lenders for six years, potentially impacting your ability to obtain credit cards, mortgages, loans, or even mobile phone contracts. Prompt repayment within 30 days will prevent the CCJ from appearing on your credit file.
If the debtor cannot afford to pay the full amount immediately, they can apply to the court to vary the payment terms, seeking affordable instalment payments. The court will then review their financial situation and, if approved, set a manageable repayment plan to clear the debt over time.
If you're considering action against a debtor, alternatives to obtaining a CCJ include mediation, negotiating a payment plan directly with the debtor, or instructing a debt collection agency. In some cases, these alternative methods can provide faster and less costly resolutions compared to formal legal action.
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