January to March this year has seen record numbers of County Court Judgements (CCJs) being awarded against individuals, a 35% rise compared to the same period last year.
The figures come from the Registry Trust, which puts them together for the Department of Justice. According to them, there were 298,901 debt judgements registered against consumers in England and Wales in the first three months of this year. This is the highest number for a single quarter in ten years.
The Registry Trust also said that the average value of a debt pursued through the courts had in fact fallen, by 17% in the first quarter of 2016 to £1,495. The average value of a CCJ in the first quarter of 2008 was £3,662 which shows that lenders are taking people to court for smaller debts than they did in the past.
The jump in CCJs highlights the growing worries expressed by debt experts about the rise in consumer borrowing. Apparently, we’re borrowing more and more, at levels not seen since the financial crash of 2008, leading some to worry that we might be in danger of history repeating itself. There are also concerns that the number of people being taken to court may continue to increase, as households feel the financial squeeze of rising inflation and stagnant wages.
What is a CCJ?
A County Court Judgement, or CCJ, is an order from a court in England and Wales that confirms you owe a certain amount of money to a business. This could be anything from a loan or credit card provider, utility firm, mobile phone company or even a local garage that you’ve used. The CCJ will state how and when you need to pay the money back. If you don’t comply with the terms of your CCJ, the lender can start enforcement action, which includes sending bailiffs round to your home and taking money straight from your wages or benefits.
CCJs damage your credit rating, as they show up on your credit history for six years. This means that any company that checks your credit history will be able to see you haven’t kept to the original credit agreement. This can mean it’s harder or more expensive for you to get credit or that it’s harder to be approved for certain services, like a mobile phone contract or tenancy agreement. If you have a CCJ you need to make sure you comply with the terms.
It’s important to remember that it is almost always possible to avoid getting a CCJ – even if the creditor has already started court action against you. It is vital that you stay in touch with your creditors – to let them know you are in financial difficulties and tell them how much you can afford to pay them each month. If you don’t feel able to contact them yourself, speak to a debt advisor who can do so on your behalf.