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What happens if my business receives a CCJ?

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What does it mean if my company receives a County Court Judgment?

A County Court Judgment, or CCJ, is an order of the court applied for by a creditor in order to enforce a debt. The creditor is likely to have demanded repayment of the debt several times, and may feel they need to use a County Court Judgment to improve their chances of recovering their money.

If your business owes a debt and you receive a CCJ, the consequences can be serious, particularly if you fail to repay the debt within 30 days. Creditors don't typically apply to the court for a CCJ lightly, so it's important to take this action seriously and seek professional advice quickly.

How does the CCJ process work?

Your creditor applies to the court for a County Court Judgment, and then you’re notified of the claim. Along with the notification, the court sends you a form to reply with information about the debt from your point of view.

Once they’ve received your reply the court decides whether to take the process further and issue a CCJ against your company. If this happens, you have 14 days to make your response, so what are your possible options?

Worried about your Bounce Back Loan?

If you are a limited company director worried about how you are going to repay your Bounce Back Loan, we are here to help. As licensed insolvency practitioners we can talk you through your options when it comes to repaying your outstanding Bounce Back Loan, as well as handling all negotiations with creditors on your behalf. Call our team today on 0800 063 9262 .

What should you do if your business receives a CCJ?

Pay the debt in full within 30 days
If you can pay the debt in full within 30 days of the judgment date there will be no negative effect on your company's credit rating, and the judgment will be removed from the court’s records.

Pay the debt after 30 days
Paying the debt in full or in instalments after 30 days means that it will appear on your business’ credit file. Although the debt will be marked as ‘satisfied,’ it will remain on your credit record for six years. This will have a negative effect on your ability to borrow money as a business, as lenders use a company’s credit file to help them decide whether to sanction loans.

Cancel the CCJ
If you believe that you don't owe the debt, or know that you've already paid your creditor, you can apply to the court to have the judgment cancelled or ‘set aside.’ This course of action is also possible if you didn't receive the court notification ‐ you may have moved premises, for example, or the creditor might have used an incorrect address. This option involves a court hearing, which you'll have to attend to explain what has happened.

What if you refuse to pay the CCJ?

Refusing to pay the CCJ can quickly lead to bailiff action, and the seizure of business assets to the value of the debt (and possibly more to cover the bailiffs’ fees). County Court Judgments are also commonly used by creditors intent on forcing a business into liquidation.

This process is called compulsory liquidation, and is instigated by a winding up petition ‐ when a creditor has a proven debt that remains unpaid, they may be able to petition for the debtor business to be wound up. If a winding‐up order is granted, your business will close down following the sale of assets and you'll be investigated by the Insolvency Service.

Start your online liquidation today

If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.

The effects of a County Court Judgment on your business

The long‐term effects of a CCJ can be very damaging for your business. The fact that the judgment stays on your credit file for six years adversely affects your ability to borrow and obtain credit from suppliers.

For more information on County Court Judgments and what happens if you refuse to pay, please get in touch with our expert team at UK Liquidators. We offer free, same‐day consultations, and operate a broad network of offices within the UK, so you're never far away from professional help.

Jonathan Munnery
Insolvency & Restructuring Expert

If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.

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