If you are struggling to pay your outstanding business debts, creditors, including HMRC, will commonly threaten to use the court system to obtain a County Court Judgement (CCJ) in an attempt to obtain payment. Partly this is because it is a relatively easy and often very effective way of clearing a debt. Despite CCJs being fairly commonplace when a business is having financial issues, we often find people asking, ‘what is a CCJ’ and ‘What will it mean to my business'? Naturally, they are also worried about what happens if they cannot pay a CCJ. It is probably a good idea for all directors to understand the process of a county court judgement, how it may affect your business and what you can do about them.
Any creditors who are owed money can apply for a CCJ. The process is straightforward and can be done online and at a low cost. For example, for a £5,000 debt, the online fee is currently as little as £185.
The claim is issued, and you will receive this from the court directly. You will be given 14 days to reply; whether that is to dispute the debt, make an offer of payment, or simply pay the debt.
If a reply is not received the creditor can take the following action:
If a creditor has a CCJ it will have the following implications.
Firstly you need to act quickly because, as you can see, the effects on your business are serious. If you have a creditor who is threatening a CCJ under no circumstances ignore it.
Some options are:
CCJs are often an indication of a wider issue and need to be dealt with appropriately. We are happy to discuss this with you further and offer a free 20 minute initial call to talk through your problems.
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