If you are a creditor of an insolvent company or a bankruptcy, Oliver Elliot can help you address your claim and concerns arising from the insolvency.
County Court Judgment (CCJ) consequences can be quite wide-ranging and it is important to take them seriously.
A County Court Judgment is in effect a Court Order that a debt is due for payment. The effect of the Court Order is that the debt is now formally recognised in law.
How Does a County Court Judgment Arise?
A Claim Form will be issued and the debtor will receive it giving them 14 days to notify the court if they intend to defend the claim. If the matter is simply ignored or you do not attend court to defend yourself then you risk having a County Court Judgment issued against you in default.
Can A CCJ Be Set Aside?
It is possible to set aside a CCJ. If you decide that you should still not have received a CCJ in default, you will have to apply to set it aside. There are strict rules about how you are able to set aside a CCJ received in default. Importantly you need to have a good defence or that it appears to the court you have a good reason to set aside the CCJ and you need to act with real urgency when applying to set aside a CCJ.
There are instances where CCJs are made because of some mistake or the debtor has not been properly served with the forms and was unaware of the county court proceedings. In such circumstances, the debtor can anticipate being able to set aside the County Court Judgment. To ensure that any damage is minimised it is important for the debtor to act as quickly as possible to apply to set aside the CCJ.
If however the debt is due and owing such that the Court is satisfied, then it will issue a CCJ which confirms the same.
Upon receipt of a Country Court Judgment you will usually have 14 days to pay it. It is possible to request an extension of time to pay it. However, if you simply do not pay the debt or ignore the county court proceedings, then the Court will issue the CCJ.
Is A CCJ Just a Piece Of Paper?
The answer is no; it is not just a piece of paper. Whilst you will receive notice of it on a piece of paper, it has a great impact on your business so please treat it with the utmost seriousness and take advice at the earliest stage. At Oliver Elliot we can assist you with it so Contact Us.
Why Is A CCJ Not Just A Piece Of Paper?
The reason that a CCJ is not just a piece of paper is because it records that a Court has formally declared that a debt is due and owing. Therefore the party that is owed the debt can now use the County Court Judgment to take action to enforce recovery of the debt.
What Are The Consequences Of A County Court Judgment?
County Court Judgment consequences are often overlooked by company debtors who might imagine it is just a piece of paper. Although a county court judgment itself cannot force repayment of a debt, it is the legal basis for further action to do so.
A CCJ can be used to start a process towards a company being wound up. If the CCJ is for a sum over and above £750, then a winding-up petition can be served on the debtor company.
A CCJ will be recorded against a company’s credit history. This means that anyone searching a credit reference agency in the name of the debtor company will see it has a CCJ registered. This may impact on the debtor company’s ability to trade if it needs to regularly obtain credit from supplier and finance companies to fund its business trading activities.
Period Of Time For A County Court Judgment?
A County Court Judgment will typically stay on your credit file and records for a period of six years if you do not pay the full amount within one month of the CCJ.
To avoid the potentially adverse consquences of a CCJ it is recommended that you pay it off well in advance of the one month timescale so that the prospects of any mistakes arising are reduced, leaving you having to apply for its removal from official records. Furthermore, it is suggested that you apply to the Court for a Certificate of Satisfaction so that you can prove the CCJ has been paid off.
County Court Judgment Consequences And Personal Liability
A company CCJ is a liability of a company; it is not a liability of a Director personally. However, the existence of a CCJ is evidence of a company’s inability to pay its debts when they fall due and that is suggestive of a company being insolvent.
If a company is insolvent then Directors although not peronally liable for a CCJ, can still be liable for claims that can be brought by a liquidator against them for wrongful trading and misfesance. Where a company is insolvent if a Director acts in their personal interest instead of acting in accordance with their duty to creditors, they can become liable for debts arising from such conduct.
How Can A Creditor Enforce A CCJ?
If you do not pay a CCJ then you should anticipate that a creditor will escalate the matter and take enforcement action. There are options available to a creditor, including but not limited to enforcement officers turning up at your company to take goods away which can seriously hamper your ability to trade.
Attachment To Earnings
An attachment to earnings is a court order that means that to pay the debt your emloyer has to set aside some of your wages to settle it.
Third Party Debt Order
A third party debt order is an order often sought against your bank to order the bank to pay some or all of the debt which is then deducted from your bank balance with the bank.
A charging order is an order that attaches the charge to your assets such as your property. This enables the judgment creditor to apply later to the court to sell the property to recover the debt. The costs of the charging order proceedings are added to the debt and deducted from the sale proceeds when the property is sold to pay off the debt.
A winding-up petition is another mechanism whereby a judgment creditor can wind up a company if it is owed more than £750 on the CCJ. This is a severe threat to a company and if the petition is successful the company will be wound up, placed into liquidation unable to continue trading.
If you need any help in relation to County Court Judgment Consequences please contact us on 020 3925 3613 and we will be pleased to help you.