How to Decide Whether to Pay a CCJ or Apply to Remove It

Discovering a County Court Judgment (CCJ) against your name can be alarming. It negatively impacts your credit rating, affecting your ability to secure mortgages, loans, and other financial products. Faced with a CCJ, you need to decide whether to apply to set it aside or pay it off. This guide will explore both options to help you make an informed decision.

Understanding County Court Judgments (CCJs)

What is a CCJ?

A CCJ is a court order that can be registered against you if you fail to pay the money you owe. It’s a formal decision by a court that you owe the debt, and it impacts your credit score significantly.

Implications of a CCJ

A CCJ on your record can prevent you from obtaining credit, such as loans or mortgages. It also affects your ability to rent a property or secure a mobile phone contract. That’s because it’s registered in the Registry of County Court Judgments. The judgment remains on your credit record for six years if unpaid.

Should you pay the CCJ?

Pros of Paying the CCJ

1. Credit Record Improvement: Paying off the CCJ within one month removes it from your credit record entirely. If you pay it after one month, it will remain on your credit file but it will be marked as satisfied, which will slightly improve your credit score.
2. Avoid Legal Complications: Settling the debt avoids further legal action, including potential bailiff visits.
3. Peace of Mind: Paying the debt can give you a sense of closure and financial responsibility.

Cons of Paying the CCJ

1. Admitting Liability: Paying the debt may imply you accept the liability, which can be problematic if you dispute the amount.
2. Financial Strain: Paying the full amount may cause financial strain, especially if the sum is substantial
3. Credit Record: If you pay it after one month, it will remain on your credit file, although it will be marked as satisfied.

Applying to Remove the CCJ

Reasons to Apply for Setting Aside the CCJ

1. Unfair CCJ: If you believe the CCJ was made unfairly, such as not receiving court papers.
2. Valid Defence: If you have a valid defence against the claim, applying to set aside allows you to present your case.

Pros of Setting Aside the CCJ

1. Chance to Defend: Setting aside the judgment allows you to dispute the claim formally.
2. Potential Credit Record Clean: If successful, the judgment is removed from your credit record.

Cons of Setting Aside the CCJ

1. Application Fees: There are costs associated with submitting an application and possibly legal fees.
2. Time-Consuming: The process can be lengthy and complex, requiring substantial effort and legal understanding.

Factors to Consider

Age of the CCJ

• Less than One Month Old: If the CCJ is less than a month old, paying it can remove it from your record completely.
• Older than One Month: If older, it stays on your record for six years, although it will be marked as satisfied if paid.

Amount of Debt

• Small Amounts: Paying small amounts might be more cost-effective than applying to set aside.
• Large Amounts: For larger debts, setting aside may be more worthwhile if you have a strong defence.

Impact on Credit Record

• Credit Importance: If maintaining a clean credit record is crucial, setting aside might be the better option.
• Bailiff Concerns: If avoiding bailiffs is a priority, paying might be the quicker solution.

Reaching an Agreement with the Claimant

Negotiating with the claimant can sometimes lead to them agreeing to set aside the judgment if you pay the debt. This approach combines both paying and setting aside, potentially offering a clean credit record and resolution of the debt.

This may sound counter-intuitive, but we’ve found that this approach can really help you. The claimant simply wants their money. They don’t care whether or not you have a clean credit record. Why not try to reach an agreement? You pay them the money. They agree not to oppose your application to set aside judgment.

We’ve often found that claimants are willing to consent to the judgment being set aside if they receive what they feel they’re owed. Depending on the circumstances surrounding the claim and the amount of the judgment, you may or may not feel this is appropriate. But it’s an option you should consider.

FAQs

Is it better to pay a CCJ or apply to set it aside?
It depends on the circumstances. Paying it off can quickly resolve the issue while setting aside allows you to dispute it and have it removed from your credit file.

Can I remove a CCJ from my credit record?
Yes, paying it within one month removes it completely, or setting it aside can also remove it if successful.

What happens if I ignore a CCJ?
Ignoring a CCJ can lead to further legal action and enforcement by bailiffs. It also means the CCJ remains on your credit file

How long does a CCJ stay on my credit record?
A CCJ remains on your credit record for six years unless paid within one month or successfully set aside.

What is the cost of applying to set aside a CCJ?
There is an application fee and potentially additional legal costs if you hire a solicitor.

Can I negotiate with the claimant to set aside the CCJ?
Yes, many claimants agree to set aside the judgment if you pay the debt.

Conclusion

Deciding whether to pay a CCJ or apply to set it aside is a significant decision that affects your financial future. Assess your specific situation, considering factors like the debt amount, the age of the CCJ, and the importance of your credit record. Consulting with legal advisers can provide valuable guidance tailored to your circumstances.

 

Need Help Removing a CCJ?

If you’re looking for practical, expert help with removing a County Court Judgment, we recommend CCJ Removal Services — a trusted, not-for-profit legal advice agency. Click here to jump to their free consultation form or call them on 0161 711 1455 to speak with an expert today.