You will need to act fast if a creditor has issued a county court judgement (CCJ) against your private limited company. If you do not get this sorted on a timely basis, you may find that in the future you are unable to secure affordable finance or suppliers that are willing to work with your venture.
In this article, we will be walking you through the potential impacts of a CCJ being issued against your limited company, as well as explaining what options are at your disposal during this time.
What is a County Court Judgment (CCJ)
A county court judgment is a court request that has been enrolled against your company since it owes cash to a creditor (for example a supplier, client or HMRC) that you have not reimbursed.
Assuming a CCJ has been enrolled against your business, that implies the court has officially concluded that you owe the cash. Assuming you neglect to adhere to the terms that are set out in the CCJ, the leaser can request that the court go to lengths to implement the debt.
Significantly, creditors can only utilise CCJs whenever they have fallen flat with different strategies for debt collection. In this way, you will have a few chances to make the payment and challenge the bank’s case under the watchful eye of a county court judgment is enrolled against you.
How is a CCJ obtain against my company?
A county court judgment is obtained against your company via the court recover system in the UK. This has taken place due to your company’s in ability to 1. File a Defence or 2. Pay the amount outstanding.
Therefore, it is likely only be a decision they’ll take assuming that they have over and again attempted to get you to repay the debt without any progress.
Whenever they begin to believe that you can’t or don’t mean to pay the debt, the initial step for the creditor is to complete an online application, which will discuss the reasons behind the circumstances of the claim. After this has been submitted, the court will contact you in the form of a letter, which will list the details of the claim. You will then be tasked with completing a form of your own to show your side of the story.
Beyond this, the county court will choose whether there is a proven debt to pay. Assuming the court sides with the creditor, you will have 14 days to consent to make the payment, debate the case or request a further 14-day extension.
If you neglect to react, the CCJ will be registered in default against you. Assuming you don’t debate the CCJ, you will have 30 days from the judgment to make payment in full or to organise a satisfactory payment plan with the creditor.
What if you refuse to pay a CCJ?
If you fail to pay the CCJ within 30 days of the judgement date, it shall remain on your business’ credit file for six years. This will make it incredibly hard to run the company effectively.
On top of this, you will most likely find bailiffs turning up to your house as they try to recover debt or seize goods to sell at auction. This is because the creditor will have a series of enforcement options at their disposal, which they are able to exercise.
The creditor is also able to issue a winding up petition against your company if the debt remains unpaid. That will mean you only have a single week to make repayment. If the court rules against you as they hear the winding up petition, your company may be closed down via compulsory liquidation, as a winding up order is made.
Does a CCJ show on the Companies House register?
Subtleties of county court judgements registered against a business are not recorded on the Companies House register. Notwithstanding, they are promptly accessible to imminent moneylenders and suppliers. They should simply look through the Registry Trust, which gives admittance to the legal Register of Judgements, Orders and Fines. They can likewise be viewed by running a check with a credit agency.
What impact will a CCJ have on your credit record?
Assuming the court concludes that the debt is genuine and registers the CCJ against you, the best way to keep the CCJ from being recorded on your credit record is to consent to pay everything inside 30 days of the judgment date. That could be as a solitary single amount or a progression of portions that have been concurred with the lender. Neglect to do as such and the CCJ will be recorded on your credit report for a very long time.
The presence of a neglected CCJ on your credit document will make it hard to get to competitive lines of business subsidising. Even though you may not arrangement to acquire any cash right now, later, you might have to refresh essential hardware, buy other key resources, or lift your business’ income, and without admittance to serious outer money, that could be exceptionally difficult.
What could be considerably riskier for your business is the effect the CCJ has on the readiness of existing and new suppliers to work with you, and the credit terms they’re willing to offer. Providers may possibly work with you in case you consent to pay for labour and products forthright, which will very likely influence your capacity to develop the business.
What happens if I pay off a CCJ?
- If you make the payment within 2 weeks of receiving the claim form
If you don’t dispute the debt and want to avoid any major damage to your company’s credit record, you should make the payment within a two-week period after receiving the initial claim form from the court. As long as you make the payment in full within this time, you’ll avoid the court hearing and not have a CCJ recorded against you.
- If you make the payment within 30 days of the judgement date
Your next most ideal choice to restrict the harm to your business’ credit report is to reimburse everything recorded on the CCJ inside 30 days of the judgment being given. In case you do, the CCJ won’t show up on your credit report. Nonetheless, the arrears and default that prompted the loan boss making a court move will stay on your report for a considerable length of time from their date of issue.
Albeit these markers will in any case influence your credit score, the general effect will be extensively not exactly assuming the CCJ was not reimbursed and stayed dynamic.
- If you make the payment after 30 days of the judgement date
Assuming that you repay the CCJ beyond the underlying 30-day time frame has terminated, either in portions or a solitary payment, the CCJ will be recorded on your credit report where it will stay for a very long time. When you make the payment, the CCJ will be set apart as ‘fulfilled’, which will show potential creditors that it’s presently not dynamic. Although, it will in any case be hard to get to credit at the most cutthroat rates, it will look better compared to an unsatisfied judgment.
How do I contest a CCJ?
Assuming you need to question the debt sum that is being guaranteed by the bank or challenge the presence of the debt by any stretch of the imagination, you will have the chance to do as such whenever you have gotten the underlying notification from the province court. You will have 14 days to react to the notification and let the court know that you mean to protect yourself.
Now, you will have three choices available to you. You can:
Debate the sum owed – If you think the debt sum on the case structure is off base, you ought to send the case structure back to the court clarifying why and incorporate all the supporting data you have. You ought to likewise pay the cash you do owe or request a 14-day augmentation. The court will then, at that point, choose whether you or the lender is correct.
Debate the case – If you don’t think you are responsible for the debt, you ought to finish and return the guard structure that will be shipped off you inside the case structure pack. You should set out the motivations behind why you are questioning the guarantee and incorporate any supporting data.
Make a counterclaim against the lender – An organisation might feel it is owed cash from the bank, for instance, in case a client kept an extent of the payment for administrations the company gave. For this situation, you ought to finish and present the counterclaim structure that is given in the case structure pack.
On the off chance that you expect to challenge the debt, you should act early. In the event that you neglect to return the suitable structures inside the time period, a CCJ will be enlisted against your business in default and its financial assessment will be impacted.
Whenever you have presented the applicable structure to challenge the debt, a court hearing will ordinarily have to happen, which you should join in. Neglect to do as such and your test will be tossed out by the court and the CCJ will be enlisted against you. You will be approached to determine the dates when you can’t go to the court while finishing your case structure.
Can your personal credit score be affected by a company CCJ?
As a rule, a CCJ that is enlisted against your business should not affect your personal credit score. In any case, there are conditions where it might. Assuming that your own and organisation accounts are held with a similar bank, the bank might be hesitant to offer acknowledge offices, for example, a business credit card, overdraft, or personal loan to you as an individual.
Assuming you have marked an individual assurance to get the obligation that has turned into the subject of the CCJ, there will likewise be an effect on your own financial assessment. Notwithstanding, conceivably more harming is the individual responsibility issues that could emerge.
Is there a CCJ against my company?
It is possible, although unlikely, that a CCJ has been filed against your company without you being aware of it. This could be the case if you have changed your business address without informing your creditors. To see if you have a CCJ, or to get an update on any that are currently active, you should check your business’ credit report.
This will provide you with details of:
- The date the CCJ was filed
- The total amount owed
- The unique court reference number
- Whether the judgement is active or satisfied
- Whether the judgement is disputed
- How long until the CCJ will be removed
- The credit reference agencies that are reporting the CCJ
What can I do if a creditor is threatening my company with a CCJ?
Assuming that your limited company is being compromised with a CCJ, an opportunity to act is presently. On the off chance that the business can’t stand to reimburse the obligation, it very well may be wiped out.
One choice is to observe a source of funding that the business could use to reimburse the obligation before the organisation’s credit record is discoloured. On the other hand, we could assist you with arranging a company voluntary arrangement (CVA) with your leasers, which will keep legitimate move from being made against you and permit you to reimburse your obligations over the long haul.
Going into administration is another choice we can consider. It will shield your business from lawful activity while you rearrange or rebuild your business and can continue trading.
Can my Limited Company get finance with a CCJ
Yes, Limited Companies can get finance with a CCJ. Lenders are happy to support businesses if you are honest about the situation and offer to implement a repayment plan to the creditor.
Need help raising finance, contact us today via our contact page and one of the team will be in contact.