| Business Advice for a County Court Judgement | | | | Ability to trade affected if you ignore the CCJ |
| (CCJ) | | | | DO NOT just ignore the CCJ application. Doing so |
| Every month the courts of England and Wales | | | | will mean the Court will accept the debt is valid |
| issues thousands of County Court Judgements | | | | and order immediate repayment in full with no |
| (CCJ) to companies.If you receive a CCJ it is likely | | | | flexible payment terms. |
| to make trading more difficult and can lead on to | | | | If a CCJ is issued, the company's ability to trade |
| a winding up petition for your business. | | | | will be affected. The first and most obvious |
| Where a creditor of a company (or sole trader) is | | | | effect of the judgement will be that the |
| unable to collect their debt, they can apply to the | | | | company's credit rating is damaged. The |
| court to issue a County Court Judgement (CCJ). | | | | judgement will be advertised in the Stubbs |
| While there is no minimum limit on the amount for | | | | Gazette and recorded on the company's credit |
| which a CCJ can be applied for, it is normal to | | | | file. Once this happens it will be much harder for |
| instruct a solicitor to carry out the application and | | | | the business to borrow from its bank in terms of |
| therefore would be unusual for the debt to be | | | | a company overdraft or business loan. |
| less than GBP100. A County Court Judgement | | | | Another issue that will be created by the CCJ is |
| (technically a County Court Judgment [note | | | | the impact on new business relationships. If a |
| spelling]) is an order made by the local court to | | | | potential new client or supplier performs a credit |
| force payment of the debt. | | | | check they will turn up the CCJ and this is very |
| Once a county court judgement has been applied | | | | likely to affect the relationship even before it |
| for, the debtor is notified and given the | | | | starts. |
| opportunity to either confirm that the debt is | | | | Possible winding up action |
| owed or to dispute it. Generally 14 days are | | | | If you receive a County Court Judgement but |
| allowed for this process. | | | | cannot afford to pay the debt, you must not |
| If you receive notice of a county court | | | | ignore this action. Generally if a CCJ is issued and |
| judgement application and agree that you owe | | | | not paid, the next form of action by the creditor |
| the debt, it is important that you respond with a | | | | will be to issue a statutory demand for the |
| proposal of how the debt will be repaid. It does | | | | payment of the debt. After 21 days from |
| not have to be payed at once, sensible | | | | receiving a statutory demand, the creditor can |
| repayment proposals (e.g. a certain amount per | | | | then apply for a petition to wind up the company. |
| month) will frequently be accepted by the court. | | | | For this reason, not responding to and ultimately |
| Once the judgement is made, the creditor is then | | | | not paying a CCJ can have very serious |
| legally bound to accept the plan. They cannot add | | | | consequences for a business. If you find yourself |
| further interest or collection charges and take | | | | in this position, it is possible that your business is |
| further action as long as the terms of the | | | | insolvent and you should act swiftly to agree on |
| judgement are met. | | | | and implement a business rescue plan. |