Having a County Court Judgment put in place against your company could lead to serious issues for your business, particularly if it later leads to a creditor seeking a winding-up petition against you. Even if a winding-up petition is not an immediate threat a County Court Judgment can present other operational difficulties and you should seek to avoid them.
Abbreviated to CCJ, a County Court Judgment can ultimately harm the credit rating of your company, making it difficult to seek financing in the future when needed. Fortunately, though, you can get a CCJ against a company removed and there is always a way forward.
A County Court Judgment against your limited company could be used to enforce payment of debt. Unlike an individual judgment, a County Court Judgment can be enforced by High Court Enforcement Officers (HCEOs). Indeed, your credit rating as an individual can also be impacted by a company CCJ, if your business has commercial loans in place which were secured by your own personal guarantees.
If you have a CCJ against your business you should consider negotiating an affordable payment plan with the creditor. The court can issue interim orders that might allow you to keep trading while you pay off your debt. This can be done via an application to the court.
So how can a business CCJ be removed from the register? The first option is quickly repaying the respective debt within one month or in instalments and advising the court that this has been done. The County Court Judgment will therefore be deleted from the credit file of your business. In fact, in certain instances if the debt is paid off quickly enough the CCJ may never even be officially added to the register in the first place.
If repayment of the debt is slower and made in instalments, once it is cleared and no longer outstanding you can acquire a certificate to acknowledge the money owed has been paid off. A record of the CCJ would still be present on the register but will be classified as satisfied so that other lenders know your business paid back the debt, which will obviously be viewed less negatively than an ongoing CCJ.
Another course of action is to request that the County Court Judgments be set aside. This can be done if you have not acknowledged a CCJ or have not defended a claim made against you, which might be the case if a pursuant creditor had not adequately made you aware of the outstanding debt status.
For example, if the creditor has had the CCJ initially served against you at an incorrect address this could be classed as a default judgment. Nonetheless, ultimately, if the creditor is likely to continue pursuing the debt it would still be recommended to seek a resolution to the matter which is agreeable to both parties.
You can challenge CCJs in specific instances and you should do so in a timely fashion, if any of the following cases apply to you:
By completing and submitting an N244 form and providing accompanying documents as evidence to support your defence you can apply for a CCJ to be set aside. Evidence supplied might be written confirmation that the debt has been settled or the proof that an error has been made in the claim by the creditor against your business.
Although CCJs are automatically removed from the register after six years this is a long time to wait to clear the record against your business and in the meantime having the CCJ in place could negatively affect your company.
Your company’s credit rating is likely to be impacted and your ability to seek finance will therefore be restricted if you do not act to remove a business CCJ.
If you need further advice on handling CCJs or having them removed, contact us at Begbies Traynor in order to understand your options through free, confidential and expert advice.
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