A County Court Judgment, or CCJ, can create serious problems for a business, especially if it precedes a winding up petition by a creditor. Even if a winding up petition isn’t a threat, however, a business County Court Judgment creates other operational challenges.
CCJs lower your company credit rating, and make it difficult to borrow or obtain further credit in the future. Furthermore, your own credit rating can be affected by a business CCJ if you’ve taken out a commercial loan with a personal guarantee attached.
So how can you remove a business CCJ from the register, or your business credit report?
If you pay off the total debt within a month and the court is advised accordingly, the CCJ will no longer appear on your business credit file. In some cases, if the debt is paid very quickly, for example, the Judgment may never appear on the register.
When full payment of the outstanding debt is made in instalments, you can obtain a certificate to show that the debt has been repaid. It will still appear in the records, but will be marked as ‘satisfied’ so that lenders know it’s no longer outstanding.
If you haven’t defended the claim made against you, or haven’t acknowledged it, you may be able to apply for the CCJ to be set aside. County Court Judgments issued under these circumstances are known as ‘default’ judgments - sometimes a creditor might serve the CCJ at the wrong address, for example, so you weren’t aware of the need to defend it or pay the debt.
It’s also important to challenge the CCJ as quickly as possible if you:
You can apply to have a County Court Judgment set aside using Form N244, and should provide documentary evidence to back up your defence, such as proof that the debt has already been repaid.
County Court Judgments are removed from the register automatically after six years. Waiting this length of time for the CCJ to be removed is an option, but the adverse effects on your business may cause it to decline.
Poor business credit ratings, restricted borrowing, and rejected applications for additional supplier credit, are all issues that can leave your organisation operating at severely reduced capacity, seriously limiting business growth.
Removing a County Court Judgment protects your business from winding up petitions, which can be presented by creditors for debts in excess of £750. If a winding up petition is successful, and a winding up order issued by the court, company assets are frozen and the business can only operate under significant restriction.
It’s also worthwhile checking the detail of any claim, and subsequent County Court Judgment, for accuracy. Creditors can unwittingly make errors in their claim, or deliberately do so to cause problems for your business, but you could have the opportunity to remove the CCJ if you act quickly.
If you’d like more professional guidance on how to remove a business County Court Judgment, please get in touch with our expert team at UK Liquidators. We offer same-day consultations at offices throughout the UK, and can quickly establish your best options.
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