County Court Judgements (CCJ) and Limited Companies?
- County Court Judgements (CCJ) and Limited Companies?.So what next?
- A limited company receiving a County Court Judgement is the start of a legal process.
- It is essentially an approved order from a court used to enforce the recipient to pay an unpaid debt.
Once a creditor proceeds in the recovery of a debt, then they can apply for a County Court Judgement. If successful, then the court may judge if the debt remains owed and payable. If found due then, Judgement entered.
Upon receiving the CCJ, you are allowed fourteen days to reply, though you may request an extension of an additional fourteen days. If you choose not to respond then, the court may issue the Judgement.
If threatened with a CCJ? Contact HBG Advisory on 0800 612 5448 for advice.
Knowing if a CCJ registered against your company?
Once a Judgement entered, the defendant will be notified by the issuing County Court via a notice. Thus it will announce a claim registered for a debt found against you or your company.
Upon receipt, you have fourteen days advise the issuing court of either your intention to defend or accept liability. Either way, you must ensure the court is informed and attend if required. Failure will lead to a judgement against you or your company.
May CCJ’s Force My Limited Company to Pay Its Debts Owed?
One of the mistakes company directors often makes to fail to take into account the long term impact of a CCJ. So, a CCJ does not force the company to pay its debts. It does though start a decline of the company finalising in the potential winding-up of your company.
Once a CCJ is entered then, this alone can be used as evidence to start winding up proceedings.
There are also several negatives of a CCJ if you wish to continue trading. Receiving a Judgement displays a low credit rating and affects your credit score if a personal guarantee is given to obtain credit.
Can you have a Judgement Stopped?
If clear evidence of a legitimate error exists, then the Judge, mat set aside or even stop Judgement by the use of Form N244.
So, if the debt is due and not defendable, then the only option is to pay it or enter into an insolvency process such as a liquidation.
How Long Does the footprint of a County Court Judgement Last on the Registry?
Though paying the debt fully within one month of the date of the court judgement removes the risk of the Judgement registered.
Make sure you prove to the court by way of disclosure of the certificate of receipt. Finally, ask the court for a Certificate of Satisfaction.
Do CCJ’s cause Directors’ to be Personally Liable for Limited Company Debts?
Once in an Insolvency Process, directors are required by law to ensure that creditors of the company are protected.
Should a director not do this, then they become exposed to criticism and potentially liable for the debts of the company due to trading while insolvent. The term Wrongful Trading applies to this course of action.
So a CCJ may not in itself make a company director personally liable for the companies debt. The receipt of a CCJ demonstrates that the company is Insolvent, thus trading Insolvently. So the director may be guilty of wrongful trading and liable for the debts of the company.
How to stop a Court from Issuing a CCJ against my business?
So as with everything, the sooner you act, the better. You may be able to stop further action.
Ensure when disputing a debt that you respond to the court as per documents received within the time limit. Often errors even exist on the application, so check everything before responding whether you accept liability or not.
So ensure you deal with the problem urgently with the court whether liable or not to stop the Judgement.
Failing to pay the CCJ?
Receiving a CCJ is considered a serious thing. So if you fail to pay it, you should expect the situation to escalate quickly towards some enforcement action.
Usually means bailiffs will turn up at your door.
Other options creditors may use:
Attachment of earnings order – Allowing money withdrawal from your earnings before you receiving your earnings to pay to the court. On account of a debt due.
Third-Party Debt Order – They stop you from drawing any money from your bank account.
Charging Order – Ranking the seriousness of the debt by pacing a charge on assets for security. Failure to pay your debt once you receive a charging order, then the applicant may go further and request via an order for an order of sale.
Winding-up Petition – If a creditor applied for the CCJ to enforce a company debt, it is a common precursor to a Winding-up Petition, which is the most severe threat any company can face. If you receive a Winding-up Petition, you will have just seven days to clear your debt, or your company will face forcible liquidation.
Is There a CCJ Register?
Operated using a third party private company on behalf of the Ministry of Justice (MOJ).
Assistance with an Ltd Company CCJ’s?
If you feel your business is facing a CCJ, then it would be wise to seek immediate help saving heartache and cost.
Contact HBG Advisory on 0800 612 5448 who are happy to help relieve your heartache.
Insolvency and a CCJ
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