Being the director of a company which has been issued with a CCJ can be very daunting for you. It is crucial that you do something about it straight away.
You should gather the relevant information and seek professional advice from an expert who is experienced in helping companies in that situation. (You should be able to get that advice for free.)
Why is a CCJ issued?
If your company owes money to a creditor and has failed to pay them, the creditor can apply to the County Court for a judgment (a CCJ) against your company to claim for the money.
Getting a CCJ issued against you shouldn’t be a surprise, as before this stage your creditor should have sent you a warning letter or default notice, letting you know that you need to repay what you owe them, or legal action will start.
What to do when a CCJ has been issued
The best thing to do is to seek legal advice immediately.
It is important to deal with the claim correctly and legally. Getting professional help will ensure that you do this.
You have 14 days to reply to the claim. If you ignore it or the 14 days passes without your response, the court will pass a judgement on the claim regardless and will not take into consideration any of your circumstances.
By responding to the claim you get to put forward your side of the matter and outline your circumstances to the court directly – which can be to your benefit.
What are your options?
There are a number of different options you can take upon receiving a CCJ:
Pay the amount in full
You can do this straight away and it means there will be no court hearing and the CCJ will not be recorded against you. You also do not need to send the forms back.
If you choose to pay in full straight away bear in mind there may also be interest and court fees too.
Defer payment / pay in instalments
If you can’t pay in full you can choose to either pay later or in instalments. You can do this by filling in the form you’ve received. A CCJ will still be issued.
Dispute the amount owed
If you do not agree with the amount that your creditors claim that you owe, you can return the Defence Form to the court outlining your argument. You can also request more time if you submit an ‘Acknowledgement of Service’ form.
If you believe it is in fact you who is owed payment, then you can claim against your creditor. In this instance you can fill out a counterclaim form, which may require a fee.
Seek Professional Help
As Licensed Insolvency Practitioners, Clarke Bell has a lot of experience in helping company owners deal with their cashflow problems.
Contact us now and we can discuss your situation with and advise you on the best option for you to take. (That advice is free.)
Consequences of a CCJ
Whilst a CCJ cannot technically force your company to pay the debt in question, if it is proven that you are able to pay it, then you will have to.
However, there are other wider consequences to having a CCJ against your company. The worst case scenario is that the creditor could take action to petition a winding up order against your company. A CCJ is also going to reflect badly on your company’s credit rating, which can affect future loans and supplier contracts.
If you, as a director, provided a Personal Guarantee to obtain credit, then your personal credit rating may be affected.
If you are worried about a CCJ against your limited company contact Clarke Bell for free advice on 0161 907 4044 or [email protected]