My Business Has Received a County Court Judgement

A County Court Judgement (CCJ) is an official court order demanding the repayment of a debt owed by a company. It can be a powerful tool to force repayment and, if unpaid can have very serious consequences for a business and its directors.

Usually, a CCJ is a last resort for a creditor after repeated attempts to recover money. However, it can also be used on its own, or combined with a statutory demand, as a scare tactic. Regardless of its intended purpose, it can lead to repossession of assets, winding up petitions and the liquidation of your business.

Why Have You Received a CCJ?

Due to the cost and effort involved, creditors will usually only issue a CCJ if they have tried other methods to resolve arrears. If you have fallen behind or missed multiple payments on a business debt, it is likely your lender will begin this process.

The court will first issue a County Court Summons, you have 14 days to respond to this. If you fail to respond or come to an agreement with your creditor the court will issue a County Court Judgement. Unlike a Statutory demand, this is a judgement, and this legally recognises that you owe the amount claimed. This opens the door to your lender initiating legal proceedings to recover debt.

How To Deal With A CCJ

You have 30 days to respond to a County Court Judgement to prevent legal action and ensure your business’ credit score is not impacted.

If you dispute the debt, do not owe the amount claimed, or the summons was not handled correctly, you can apply to have the CCJ ‘set aside’. This involves applying to the court to remove the judgement. You need to be sure that you can back this up with evidence. This is why it is always best to consult insolvency experts if you are in receipt of a CCJ.

Alternatively, you can pay the debt to cancel the CCJ. However, it may be possible to settle with your lender for a reduced amount, again it is best to consult with specialists before making this decision.

After 30 days

After 30 days, the CCJ will appear on your business’ credit file. Since your debt is now legally recognised, the lender can apply to send bailiffs to repossess company assets such as stock, machinery and even properties.

In addition to this, lenders can issue a winding up petition against your company. This is the first stage to forcing the closure of your business. If granted, your company will be placed into liquidation, you will cease to be a director and the company will cease to exist.