Can A CCJ Be Removed From A Limited Company?

Can a CCJ be removed from a limited company? If a County Court Judgment (“CCJ”) is registered against a company it is available for lenders and financial institutions to search using credit reference agencies such as Experian and Equifax which will highlight the issue. 

It is natural to want a CCJ to be removed and it is possible. The merits or otherwise of removal of a CCJ will depend however on what it was there in the first place.

What Is A Company CCJ?

A CCJ is a court judgment that arises when the court makes an order that a company owes a creditor a sum of money. The CCJ will identify the company, its creditor and the amount owing, typically along with interest.

When a company receives a CCJ it will have 21 days to make payment of the debt or come to an arrangement with the creditor, failing which a CCJ will be registered. There is a requirement under Section 98 of the Courts Act 2003 for a Register of Judgments from the County Court to be kept. This is done by Registry Trust which maintains the official Register at Trust Online.

Impact Of A CCJ On A Company

A CCJ due to Country Court Judgment consequences may make it harder for a company to obtain credit as this may sound the alarm for a lender or suppliers from whom the company may seek goods and services. This past performance may impact the perceived risk of doing business with the company.

As a result, time should not be lost in seeing if indeed a CCJ could be removed from a limited company so that its access to finance is not affected adversely. 

Not only does having a CCJ make it perhaps less likely that a company will be able to obtain credit and loans, it may also make those it can obtain more expensive. If the company is perceived as a risk for a lender it may require higher rates of interest before it is willing to lend money to the company. It could also require personal guarantees from the directors or additional forms of security.

Can A CCJ Be Removed?

The potential removal of a CCJ from a company’s record showing in the Register of Judgments, Orders and Fines will depend on the circumstances that led to its existence in the first place.

If the CCJ was paid within one month of being issued then it can be removed from the register by writing to the court and providing evidence of payment. You can apply to the court for a certificate of cancellation using form N443 along with a cheque for £14 made payable to HMCTS.

If the CCJ has been paid after one month you cannot get full removal from the register but you can have it marked as satisfied. It will remain on the register for 6 years but people can see the company has paid the debt. If you want proof of satisfaction then using the form N443 you can seek a certificate of satisfaction in much the same way as for cancellation.

Sometimes CCJs can arise when there is a dispute but due to a potential oversight or failure to attend a court hearing the disputed creditor may obtain judgment by default. It is possible if the company acts quickly to apply to set aside the judgment and look to remove the CCJ. The matter can then be properly disputed. If you have such a situation you may wish to take advantage of the assistance of solicitors experienced in addressing such matters. If you need a recommendation do not hesitate to get in touch with us and we can inform you of a number of potentially suitable firms.

Creditors Voluntary Liquidation Solution To A CCJ

A CCJ that cannot be paid is a clear sign the company is insolvent. If there is no prospect that a CCJ can be repaid then it might be the company cannot avoid insolvent liquidation.

A company that cannot avoid insolvent liquidation should take steps to limit the damage that could be caused to creditors otherwise the directors could be in the firing line for a period of wrongful trading. This could cause them some personal liability for company debts that increased during the wrongful trading period.

As a result, a commonly and legally acceptable practice fully provided for under the Insolvency Act 1986 which shows the responsible and proactive approach deployed by the directors is known as Creditors Voluntary Liquidation. It is a useful insolvency procedure that enables the directors to close down a company and appoint a liquidator who can in an orderly and legal manner wind up a company’s financial affairs before it is dissolved and struck off at Companies House.

It is not the only available procedure to address a limited company that is in financial difficulty evidenced by the existence for example only of a CCJ that cannot be removed. However, other insolvency company rescue procedures such as Administration and or Company Voluntary Arrangements which may enable the restructuring of company debts tend to have added restrictions but for a company with a profitable core business, they can be usefully deployed in the interests of rescuing the business and enabling its survival.