If your company is facing financial difficulties, such that repaying creditors on time becomes impossible, then it is likely that your company will receive a CCJ, or County Court Judgement, before long. Alternatively, a CCJ could be issued as a result of director mistakes, such as being disorganised in their creditor repayments.
Regardless of how your company receives a CCJ, it will have notable effects on your company if not dealt with swiftly. You will either have to pay the CCJ in full, or dispute it, taking the matter to the courts. Depending on your circumstance and your actions, you may be able to remove the CCJ from your records.
In this article, Clarke Bell will discuss County Court Judgements, their effects on your company, and how you can remove one from your records.
What is a CCJ?
A CCJ is issued to companies or individuals by the courts, once its creditors aren’t confident that the debtor will make repayments. This document orders the recipient to pay their debt in full; otherwise, further action will be taken. If not paid, a CCJ essentially acts as the first step towards compulsory liquidation, which can have far-reaching effects on both companies and directors, depending on the situation at hand.
If you dispute the legitimacy of your CCJ, either because you think your creditors have exaggerated the extent of your debt, or you dispute the existence of the debt at all, then you may make an objection. In all likelihood, this dispute will take the matter to the courts, unless your creditors back down and rescind their complaints. If you do not attend your court hearings, or you lack sufficient evidence to back up your claims, you may be ordered to repay the debt in full, even if your creditors have exaggerated your debt.
Effects of a CCJ on your company
If your company receives a CCJ, it is best to deal with it immediately to avoid any lasting effects. These effects will come into force after one month of receiving the CCJ, and can negatively affect your company for quite some time. Once on your record, a CCJ can be seen easily by potential creditors and suppliers, which can complicate attempts at raising finance and obtaining stock or equipment in the future. The CCJ will remain on your record for a period of six years, which can be severely detrimental to any company. To avoid having your CCJ registered, consider the three methods you have available.
How can I avoid having my CCJ registered?
There are three methods that you can use to avoid having your CCJ registered, and therefore made visible to potential creditors and suppliers in the future. Which method is appropriate for you will depend on your situation, but it’s important to make your decision fast. You have one calendar month to act before it appears on your record for six years.
Wait for the six years to elapse
The easiest, though certainly not the quickest, method of removing a CCJ from your record is to wait. Your CCJ will be removed from the register after six years, starting from the date of your judgement. The CCJ will be automatically removed after this time, so no further action from you will be required.
After six years since the judgement, your CCJ will be removed regardless of any other factors. This means that even if you haven’t paid your CCJ, it will be removed after six years assuming your creditors have not taken further action. After this point, it will be too late for your creditors to enforce the CCJ. This method of removing a CCJ from your record may be the best for you if it has been registered for the majority of the six years. It requires no action from you, and assuming you pay it, does not make you vulnerable to further legal action from creditors. However, if your CCJ is recent, other methods may be preferable.
Apply to have the CCJ removed
If your CCJ has been issued recently, it makes much more sense to apply for its removal, as opposed to waiting for it to elapse. You can do so if your CCJ is a default judgement. CCJs that are not contested when first issued are classified as a default judgement, and although they will still take effect, recipients can apply to have them removed from the record.
If you intend to apply for the removal of your CCJ, you must first have a good reason for contesting it. You will need to defend against the claims of your creditors, or have a reason for disputing the existence of the debt. For example, if you believe the debt was erroneously posted to your address, or you believe your creditors have embellished some of the details, you may have good standing when it comes to a legal dispute. However, you will still have to provide evidence and prove your case to the courts to be in with a chance of a favourable ruling. If you do so, your CCJ will be removed from the record immediately, and will no longer be visible to future creditors.
Pay the CCJ in full
The final method of removing a CCJ is to promptly pay it in full. For the CCJ to be removed from your records, you must pay it completely within a month of receiving the order. In some cases, the CCJ will be recorded within as little as a few days, but prompt payment within the calendar month window will see it stricken from records. If this happens, it will be as if you never received a CCJ, sheltering your company from any credit-related repercussions.
Once you have made your payment, you shouldn’t breathe easy just yet. It is the responsibility of the creditor to inform the courts of a complete payment, so you should remain in contact with your creditor until they report that they have done so. If they don’t communicate with you or have yet to inform the courts of your payment, you may notify them instead. Once the debt is settled, the CCJ will be removed from your records, assuming it was made within a calendar month of the order.
Let Clarke Bell help
If your company is facing financial difficulties, don’t struggle alone, let Clarke Bell help. We have more than 28 years of experience in helping companies solve their financial problems, and we can do the same for you. Whether it be a Creditors’ Voluntary Liquidation, a Business Rescue plan, or another solution, our expert team can ensure your company attains the best outcome possible. Don’t hesitate to contact us today for a free, no-obligation consultation and find out exactly what we can do for you.