But help is at hand, just not from a trainee Angel.

For any director or business owners, the weeks leading up to Christmas are usually a mixture of finalising end-of-year accounts, managing holiday staffing and trying to secure some much-needed down time for yourself. 

The last thing you want to find amongst the Christmas Cards is a County Court Judgement (CCJ).

Receiving a formal declaration from a court that your company owes a debt is stressful in itself but if a CCJ arrives this festive season, prompt action can save your company’s credit rating and prevent unwanted visits from bailiffs before the New Year.

Here’s your guide on how to deal with a CCJ this holiday season. 

  • Don’t Ignore It!

This is the golden rule to remember. The most dangerous thing a director can do is to bury their head in the snow and hope it will go away. Ignoring a CCJ won’t make it disappear; it will only escalate the situation.

Once a judgement is issued, typically there’s a strict 30-day window to act. 

If you resolve the issue within this timeframe then you can have the judgement removed from the register entirely, as if it never happened. Missing this deadline means the CCJ will remain on the company’s credit file for six years, damaging your ability to secure future loans, credit or more favourable terms from suppliers.

  • You Have Options

There are generally three routes forward after receiving a CCJ:

Option A: Pay in Full – also known as the clean slate. If your business has sufficient assets or cash, then paying the debt completely within 30 days is the best outcome. This clears the debt, satisfies the creditor and ensures the judgement is removed from court records, leaving no negative footprint on your credit rating. 

Option B: Negotiate more Time To Pay – if the debt is legitimate but you cannot pay the sum within the 30 day limit, don’t ignore the court. You can apply for a temporary stay of the judgement and propose a repayment plan that is acceptable to creditors and the court.  You’ll generally need to submit Form N245 to the court, providing a detailed breakdown of your company’s income and expenditure to prove what you can realistically afford. Transparency and honesty are vital here to get your payment plan accepted.  

Option C: Dispute the Debt – if you believe the CCJ has been issued in error – either because you have already paid the debt, the amount is wrong or you never received the original claim forms – you have the legal right to challenge it. In this scenario, you can apply to the court using Form N244 to ask for the judgement to be set aside. You will need compelling evidence such as receipts and correspondence to support your claim. It’s also sensible to request an interim stay on enforcement while the court reviews your application.

  • The Risk of Enforcement

If you don’t pay or respond then you don’t need the Ghost of Christmas Yet To Come to show you what will happen next, as the creditor can move to a range of enforcement options. 

For debts over £600, creditors often transfer the debt to the High Court to use High Court Enforcement Officers (HCEOs). 

HCEOs are faster and have greater powers than private bailiffs. They can visit your business premises or your home, if you’re a sole trader using it as your trading address, to seize assets and goods to be sold. This is a scenario every director should avoid – especially over Christmas.

  • How will this affect you personally?

A common and well-founded fear for directors around CCJs is their personal liability. 

Limited Companies – Generally directors are not personally liable for company debts unless they have specifically been found guilty of wrongdoing. However, if they’ve signed personal guarantees for business loans, lenders can bypass the company’s limited liability status and target personal assets.

Credit Rating – A company CCJ should not directly impact on your personal credit rating, though it may affect your ability to get personal finance if you bank with the same bank as your business.  

It’s a cliche but a CCJ can often be viewed as a harbinger for deeper financial distress for a business. Statistics show that companies receiving a CCJ are at a significantly higher risk of insolvency, with the average time between a judgement and insolvency being around seven months. 

If your business has a CCJ against it, there are other formal options to consider that can provide a way forward including a Company Voluntary Arrangement (CVA) or administration, both of which offer legal protections against creditors while the company restructures its finances. 

Don’t let a CCJ ruin your Christmas if you receive one. 

Get in touch with us as soon as you can and we’ll let you know how we can help you overcome this obstacle and set the company on its strongest footing for the New Year and beyond.