How to respond to a CCJ against your business

When you receive a CCJ there is a limited window of opportunity in which you can act to prevent it from being registered against you.  How you should respond, however will ultimately depend on the judgment details.  Here we outline some key questions and their corresponding actions to help you respond to a CCJ in the most effective way.


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A county court judgment (CCJ) has been registered against my business. What should I do?

A. Does the CCJ have your correct name / business name on?

  1. Yes, the details are correct. See question B.
  2. No, the details are materially wrong

B. Do you owe the debt amount?

  1. Yes, I owe the full amount. See question C.
  2. No, I dispute that I owe the debt

C. Can you repay it within 28 days?

  1. Yes, I can repay the full amount plus costs within 28 days
  2. No, I will need a longer period of time in which to pay the amount
  3. No, I cannot repay the CCJ and my business has other debts as well

how-to-respond-to-a-cc-against-your-business

The details on the CCJ are materially wrong

If you think that the details on judgment are wrong to such a degree that the CCJ should not have been granted, you can apply to have the CCJ set aside on that basis.

A good example of this might be a CCJ that has been issued against an individual when it should have been issued against a limited company.

Be aware that it is quite difficult to get the courts to ‘change their mind’, so the onus of proof is on you to demonstrate that the Court made a wrong decision, or were misled.  Many of these applications are not accepted by the Courts, so it may be worth taking legal advice or assistance.

To apply to have the CCJ set aside, you will need to pay a Court Fee (£255 as of April 2016), and complete Form N244. The Court will then send details of a hearing, which you will need to attend to put forward your case.

 

I dispute the amount of the CCJ debt

If you think that the amount on the judgment is incorrect, you can apply to have the CCJ set aside on that basis.

Be aware that it is quite difficult to get the courts to ‘change their mind’. The onus of proof is on you to demonstrate that the Court made a wrong decision, or were misled.  The majority of these applications are not accepted by the Courts, so it may be worth taking legal advice or assistance.

To apply to have the CCJ set aside, you will need to pay a Court Fee (£255 as of April 2016), and complete Form N244. The Court will then send details of a hearing, which you will need to attend to put forward your case.

I can repay the CCJ in full within 28 days

If you can repay the CCJ, it is best to do so within 28 days of when it was granted.  This will stop it from appearing on the public register, and it will avoid the negative effects on your or your business credit rating.

Pay the person or business you owe money to directly (preferably by bank transfer), making them aware that you have settled the payment in full.  

I need longer than 28 days to repay the CCJ

If you can’t repay the full amount ordered within 28 days of judgment, the CCJ will be registered on the business’ credit file.  The creditor will also be able to apply to enforce the debt by way of a warrant for bailiff / enforcement officer to attend your premises.

You can delay any bailiff action, and also request that the judgment debt be payable over a period of time by completing Form N245, and paying a court fee, currently £50.  The court will then decide whether to accept your suggested instalments or not.

The benefit of Form N245 is that it will give you breathing space from bailiffs until your creditor considers your offer, and the court makes a final decision.  Once the court issues a decision, unless they agree to installments, you will again be at risk of further enforcement action.

I’m unable to repay the CCJ and have other business debts

If you can’t repay the full amount ordered within 28 days of judgment, the CCJ will be registered on the business’ credit file.  The creditor will also be able to apply to enforce the debt by way of a warrant for a bailiff / enforcement officer to attend your premises.

You can delay any bailiff action, and also request that the judgment debt be payable over a period of time by completing Form N245, and paying a court fee, currently £50.  The court will then decide whether to accept your suggested instalments or not.

The benefit of Form N245 is that it will give you breathing space from bailiffs until your creditor considers your offer, and the court makes a final decision.  Once the court issues a decision, unless they agree to installments, you will again be at risk of further enforcement action.

Once you have dealt with this initial problem, it’s time to look at the overall financial health of your business.  If you have other debts or tax arrears, you’ll find helpful information on these pages:

If you would like to discuss this in more detail, or would like more tailored advice for your business, don’t hesitate to contact one of our business rescue experts directly.