If you have a County Court Judgment (CCJ), you may be able to include it in a debt solution like a Debt Relief Order (DRO) to pay it off alongside other eligible debts. This can make it easier to manage multiple debts and avoid further legal action being brought against you.
What is a CCJ?
A County Court Judgment (CCJ) is a court order that your creditor can apply for if you owe them money and you've failed to come to an agreement with them to repay what you owe. It is available in England, Wales, and Northern Ireland.
If the court agrees with your creditor, they will either issue a judgment forthwith (where you pay the full debt in a single instalment) or a judgment in instalments (where you pay the debt in monthly instalments until it's fully repaid).
You will receive a letter in the post confirming your CCJ. However, it's important to note that your creditor will contact you several times to try to arrange payment of the debt before going to court, so a CCJ should never come as a surprise.
Once you've received a CCJ, you can choose to repay what you owe as per the court's terms or attend a hearing date to get it set aside (cancelled). If you don't do anything, the court can take further enforcement action against you, including sending bailiffs to your home.
A CCJ affects several areas of your life, especially if it remains unpaid. Even if you don't believe you owe the debt, it's crucial that you respond as soon as possible, instead of just ignoring it and hoping it goes away.
How much unsecured debt do you have?
Will credit reference agencies know about a CCJ?
Yes, credit reference agencies will be notified of your CCJ because it is a matter of public record. Once they have been informed, the CCJ will be added to your credit report for six years.
During this time, your credit score will be damaged, and you'll find it difficult to get approved for most forms of credit. This includes new bank accounts, credit cards, loans, building society accounts, phone contracts, and mortgages.
As well as your credit record, a CCJ will also be added to a public register called the Register of Judgments, Orders and Fines. Anyone can access this register for a small fee, but it is usually only used by lenders when they need to verify your credit history and landlords when you apply for a tenancy agreement.
What is a Debt Relief Order (DRO)?
A Debt Relief Order (DRO) is a formal insolvency procedure available in England, Wales, and Northern Ireland. It is often referred to as a lower-cost version of bankruptcy, as there is no application fee required.
DROs are best suited to individuals who have low incomes and few assets. To qualify, you must not own your home, owe less than £50,000, have less than £75 left each month after essential expenses, and your vehicle must be worth less than £2,000. Your total assets must also be valued at £2,000 or less, but basic household items (e.g. cutlery, beds, and televisions) and disability premiums won't count towards this threshold.
Only certain qualifying debts can be included in a DRO application. These are mostly non-priority debts, such as credit cards, loans, catalogues, hire purchase agreements, utility bills, benefits overpayments, council tax, telephone bills, conditional sale agreements, Buy Now, Pay Later (BNPL) agreements, income tax, and rent arrears.
Certain excluded debts can't be added to a DRO. This includes student loans, court fines, child maintenance arrears, debts incurred through fraud, TV License arrears, and anything owed under family proceedings.
How does a Debt Relief Order (DRO) work?
You can only apply for a DRO through an approved intermediary. Once you apply, a government civil servant known as an Official Receiver will review, approve, and manage your application. Your DRO adviser will then work out your allowable expenses, which are payments that reflect a basic domestic need.
Once approved, all DRO debts will be frozen for a fixed period (typically 12 months) and your creditors won't be able to contact you, add interest or fees to your balance, or take court action against you.
You'll need to stick to certain restrictions for the duration of your DRO. For example, you won't be able to set up a limited company or act as a company director without permission from the court, and you must inform lenders if you want to apply for credit of £500 or more. A DRO may also affect or delay your application for British citizenship because it triggers the Home Office's 'good character' requirement.
A DRO will be added to your credit file and the Insolvency Service's Individual Insolvency Register for six years from the date of approval. This can damage your credit rating and make it difficult to get approved for most forms of credit, as lenders will view you as high risk.
If your financial situation doesn't improve after 12 months, all debts included will be written off, and you'll be discharged from the arrangement.
Find out if your debts qualify
Check my eligibilityCan a CCJ be included in a DRO?
Yes, a CCJ can usually be included in a DRO, as long as the court order is for a debt that can be included in a DRO.
For example, if the CCJ was issued for a credit card, loan, or BNPL agreement, it can be included in a DRO, and you'll no longer be expected to pay the judgment separately. However, if the CCJ was for a court fine, student loan, or child maintenance arrears, it can't be included, and you'll still be required to pay it alongside the DRO.
Generally, CCJs are only issued for non-priority debts, so it's unlikely that you'll encounter a situation where you can't include a CCJ in a DRO.
If you're not sure whether or not your debt is a non-priority debt, you can ask the court that issued the CCJ. You'll need your case number when you contact the court, which you can find on your CCJ claim form.
Once you've entered into a DRO, your creditor won't be able to issue a new CCJ against you. The only situation in which they may be able to do this is if your circumstances change at some point during your DRO period (e.g. your income increases), and you're no longer eligible for the arrangement.
How are benefits dealt with in a DRO?
When you apply for a DRO, any existing benefits you receive, such as Universal Credit, should remain unaffected, and certain disability benefits will be disregarded as assets. This is to ensure any extra costs associated with living with a disability are accounted for and are not taken into account when calculating your spare income.
If you receive your disability benefits in a lump sum, such as Personal Independence Payment (PIP), Disability Living Allowance (DLA), or Attendance Allowance (AA), they will be disregarded before and after your DRO is approved. Ongoing payments of these benefits can also be offset and classed as 'adult care costs'. This essentially means that the amount you end up receiving is cancelled out by your disability-related expenses.
However, any backdated payments you receive will usually be treated as an asset if you receive them as a lump sum and will be classed as income if you receive them in regular instalments.
If you're worried that your benefits payments may affect your DRO application, don't hesitate to reach out for expert debt advice before applying.
What other debt solutions can include a CCJ?
If you have a CCJ and you're looking to enter a debt solution, a DRO isn't the only option available to you. Depending on your circumstances, you may also qualify for the following:
Individual Voluntary Arrangement (IVA)
An Individual Voluntary Arrangement (IVA) is a legally binding debt solution available in England, Wales, and Northern Ireland. In most cases, an existing CCJ can be added to an IVA.
Once your IVA has been approved, you will start making monthly payments to an Insolvency Practitioner (IP). They will then be spread among all included creditors, allowing you to pay a portion of each debt at the same time.
Most IVAs last between five and six years, after which time the included debts will be written off.
Bankruptcy
Bankruptcy is the legal process of writing off the unsecured debts you can't afford to pay in England, Wales, and Northern Ireland. Creditors with CCJs can be included in a bankruptcy order.
During bankruptcy, you usually won't be required to make any payments towards any of the money owed. However, if you have money left each month after paying essential expenses, you may need to make monthly payments under an Income Payment Agreement (IPA).
If your financial situation remains unchanged at the end of the 12-month bankruptcy period, the included debts will be written off.
Administration Order (AO)
An Administration Order (AO) is a legally binding agreement available in England, Wales, and Northern Ireland. It allows you to repay your debt in regular instalments as laid out by the court.
To get an AO, you must have two or more debts totalling no more than £5,000 and an unpaid judgment from the County Court or High Court. If you don't have a County Court or High Court judgment, you must wait until your creditor has served you with one before you can apply for an AO.
During an AO, you make a single monthly payment to the court, which is then distributed among your creditors until all included debts have been fully repaid. Your creditors will also be prohibited from taking further action against you, unless granted permission by the court.
Informal debt solutions, such as a Debt Management Plan (DMP), can't include a CCJ, because there are no legal frameworks in place preventing your creditors from taking further action against you. This means that they are free to issue or enforce a CCJ against the debt if they wish, even if you're actively making repayments.
However, as long as your creditor is receiving regular payments for the debt, it's rare that they will apply to the court for a CCJ.
We’ve helped more than 300,000 people find a solution
As part of the UK Debt Expert Group
Conclusion
Being issued with a CCJ you can't afford can be stressful, but you may be able to include the judgment in a debt solution to make it more manageable to deal with. One of the debt solutions that can include a CCJ is a Debt Relief Order (DRO).
Not all debts are covered by a DRO, but as long as the original debt that the CCJ was issued against is a qualifying debt, you should be able to add it to the DRO to streamline the debt repayment process.
If you want more information about the debt solutions that can include a CCJ, don't hesitate to reach out for free debt advice from an authorised debt adviser or charity. Whatever money problems you're facing, there are options available to help you regain control of your finances.
