• Huge rise in default CCJs that people were not aware of

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    Photo taken from online version of Daily Mail article.

    The Daily Mail has published this article: http://www.dailymail.co.uk/news/arti...-families.html It was not just an article, it was front page news on the day. The issue clearly needs addressing, the figures are staggering. Ordinary consumers are having CCJs issued against them without them even knowing about them, leaving them with no option to defend the claims or negotiate a settlement or a repayment plan before reaching the CCJ stage. Although the article focuses on families looking for a mortgage, CCJs can have an impact on many other aspects of life including employment.

    Default judgments can be easily obtained if a defendant fails to respond to a claim within 14 days. See responding to a claim and judgment to gain a better understanding of how the process works.

    More than 2,000 judgments are being signed off every day, without the cases being defended or heard by a judge in open court. The number of CCJs has risen by more than a third in just three years almost 900,000 were issued last year, and 85 per cent were uncontested.
    The article focuses on families because of the way people tend to feel about things where innocent kids are affected, however, CCJs are normally issued against one person, unless the debt was a joint debt to start with. It also focuses on mortgages, because so many people are keen to buy a home of their own. In reality, a CCJ can not only affect your ability to obtain credit for the six years it remains on file, it can also affect your employment prospects and make it difficult to rent privately. See CCJs for more information.

    Emphasis is placed on parking penalties as well as utilities and mobile bills, because these tend to be relatively small amounts when compared with credit debts, however, the biggest culprits are the purchasers of delinquent debts. As can be seen below, Lowell alone is responsible for nearly half a million CCJs in the past three years, Cabot for nearly a quarter of a million. The two of them are behind the vast majority of the CCJs reported in the article.

    In the past, banks often issued proceedings themselves but these days, most financial institutions choose to sell on defaulted accounts, usually for 10% or less of their stated value. Because these debt acquirers often also perform collection activities, they are commonly referred to as DCAs, even though their role is substantially different from those who merely collect debts on behalf of their clients. See DCAs for more details.
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    It is possible to apply to have a CCJ set aside. The article doesn't go into much detail about that, because it's probably beyond the scope of the paper to do so. However, when it comes to judgments, prevention is always better than cure. Once judgment is obtained, it becomes more difficult to get the necessary information to defend it. In the case of credit debts which constitute the majority of debts acquired by debt purchasers such as Lowell and Cabot, the duty to respond to a request under ss77/79 of the Consumer Credit Act ceases to exist once judgment has been obtained. See CCA requests.

    To apply for set aside, the applicant must fill in an N244 form and pay a fee, currently 255. The ongoing increase on court fees has made it increasingly difficult to make these applications, particularly for those people with small judgments which may not warrant the 255 outlay and those who do not qualify for remission of the court fee, restricted to those on benefits or very low incomes with very little capital. See setting aside a CCJ for more details.


    Many of the people affected would have no experience with litigation or court procedure and won't know where to begin. Some will, no doubt, come across one of the many forums, where the advice they will receive will depend on whoever is posting there at the time, and what mood they are in. Rather than providing a concise guide to performing the necessary tasks and drafting the required documents, forum threads will contain too may posts and too much commentary, confusing the issues.

    People like to show off on forums and, for many, that will be their main opportunity for social interaction. Some will want to showcase their armchair legal knowledge and feed their egos, others will have their own agendas. In any case, forums often provide inaccurate information and too much waffle. Forum owners want traffic and members because it looks good to the outside world and increases their revenue where they use advertising, referral links, subscriptions or other sources of revenue. They will encourage posting and, as a result, threads end up with a lot of extraneous and irrelevant content. Not what you need when you're trying to find out what do with a recently uncovered CCJ!


    The article refers largely to people who've missed out on a mortgage and/or first discovered they had a CCJ after being turned down for credit. In reality, we can say these are the lucky ones, because they've not been contacted by bailiffs attempting to enforce the judgments, nor have their creditors applied for an attachment of earnings order to have money deducted from their wages by their employers. They've not had their cars clamped and towed away, nor has the land registry recorded an interim charging order against their home.


    For many people, the first they hear about a CCJ is when they get a letter from the Land Registry saying there is an interim charging order recorded. From October 2012, charging orders can be obtained for any judgment over 1,000 and they have the effect of securing the debt against the debtor's property. See charging orders. A charging order does not preclude enforcement by another method such as bailiffs or an attachment of earnings. See below.


    Others find out there's a CCJ against them when they receive a notice that an attachment of earnings order has been applied for. AoE orders can only be obtained against people who work for an employer, which excludes the self-employed and unemployed, however, neither the creditors, nor the courts will know who is employed and who isn't, so these notices can be received by anyone. If the creditor knows who the debtor's employer is, they can contact the employer directly. An AoE can have dire consequences if their employer is less than keen on people with CCJs, especially those who handle money or are in a position of trust within the business, and in the financial sector in general. For some, it can result in losing their jobs.It is possible to apply for the order to be suspended but you need to know how. See attachment of earnings orders.


    Judgment creditors are increasingly obtaining warrants of control to enforce their CCJs. These warrants allow bailiffs to visit the debtor's home or place of business to seize goods to be sold in order to pay the debt. Dealing with bailiffs can be scary and intimidating, as well as embarrassing, if the whole street sees the bullies at your door. Most people are not aware of their rights or even the role of bailiffs. It's not uncommon to think that you could be arrested by them or that you have a duty to let them in, even when that's not the case. See dealing with bailiffs.

    In addition to the distress caused by this type of enforcement, once bailiffs get involved, what started out as a relatively small debt can quickly grow into a huge debt, once bailiff fees are added to the debt. Let's not forget this happens after court fees and possibly solicitors' costs have already been added to the judgment amount. Bailiffs are allowed to charge a set fee for every stage in the enforcement process. The first stage, known as the compliance stage, carries a 75 fee, and it refers to the act of instructing bailiffs and them issuing a notice of enforcement. This means that, by the time you find out bailiffs have been instructed, you will have become liable for this fee. See bailiff fees for more details.

    Debts over 600 can be transferred to the High Court for enforcement, however, this does not apply to debts arising from agreements regulated by the Consumer Credit Act, which include most credit debts, i.e. credit cards, personal loans, vehicle finance, catalogue accounts, payday loans, etc. When High Court Enforcement Officers (HCEOs) get involved, the amount charged in fees can often exceed the original debt amount. To see how quickly debts can grown when bailiffs or HCEOs get involved, you can use our bailiff and HCEO fees calculator.

    Although you don't have to allow entry to the bailiffs, they can still gain peaceful entry through an unlocked door and seize goods located outside your home, motor vehicles being the most obvious. If your car, van or motorbike is parked outside your home, within your own land or on a public road, it can be immobilised and seized, however, this isn't the case if parked on private land belonging to someone else. See bailiffs and motor vehicles.


    It must be said that the article dramatises the situation a little, by suggesting that people may be losing their homes as a result of these judgments, only when you read what it actually says, it refers to a people missing out on the opportunity to buy their dream homes, which is not quite the same thing. The family that ended up homeless was as a result of them exchanging contracts on their home prior to securing their next home. That's hardly a good idea, as, under English law, offers to buy property are not legally binding and can be revoked at any time prior to the exchange of contracts. This means that, even if they had their mortgage all sorted out, they could still find themselves without a home to move into.

    On the other hand, the article also leaves out a few very important facts, such as the potential for enforcement action, including bailiffs knocking on your door and towing your car away.
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