How can CCJs affect a mortgage application?

amarsreject

My girlfriend and I saw a Halifax mortgage advisor a few months ago. All went well and our house is currently on the market.

Unfortunately, we have just this week received an expired CCJ via my gf's mother's address, stemming from an incident with a hire car back in 2004/5. Accidental damage happened to a car we hired, they tried to charge us, we agreed at the time over the phone that the matter would be dropped. Seems that car company went into liquidation, and didn't write off what they claimed we owed them, and 4 years and three changes of address later the liquidation company has decided to dump this CCJ on us with no warning and no time to respond.

We are in discussions with the company to try and pay the money off and have the CCJ quashed, but my question is this:

We have had no previous debt problems, and the mortgage we are applying for is a direct port from an existing one with Halifax. Will a CCJ like this affect our application drastically, and is there anything more we can do?

Many thanks in advance.

sammyjammy

So how old is the CJ and how much is it for? You can have it marked on your record as in dispute but it is still likely to screw up your chances with a high street lender, what % deposit do you have?

amarsreject

The CCJ is from March or so, I think, and was valid for 21 days. It was only sent to an address where it reached us last week.
We have 10% deposit. Are we best off informing our mortgage lender about this now, or try and sort it out first?

not_tonight_josephine_2

It's possible that you could try to have the CCJ set aside on the grounds that you never received the court documentation so had no opportunity to defend yourself. If you head over to the debt free wannabe forum there will be people who can advise how to do this.

If you can get it set aside then arrange a settlement with the liquidation company then your credit file should not be affected

newrecruit

Hi
CCJ is a court order so it would have been dealt with like any other court case, and you should receive the letter from the court requiring you to attend the hearing.
If you did attend the court on the hearing date, you would have the opprtunity to put you case forward. If you do not attend, the court can award CCJ against you in your absence requiring you to settle the amount owed by the creditor. CCJ will remain on your credit file for 6 years, and after that it will be removed from the file.

You caseis a curious one. Firstly was not the damage covered by the insurance? It is a legal requirement that the car you hired was insured, and often a car hire company will insure their cars fully comp.
Can you prove that the damage was not your fault? Or at least you can put forward a convincing argument towards it?
I know it was almost 5 years ago, but you say you did not receive the court letter, can you provide any proof to that effect?

If you can prove these, you may be able to apply to the county court which issued CCJ to Set Aside the Judgement.
The fact that the hire company has been liquidated may also be in your favour.
I would seek a legal advise if I were you.

No one can enforce CCJ against without your knowledge. CCJ is awarded because the court has sent you a letter informing you of the hearing date and the court is satisfied that you have on deceided not to attend the hearing, hence passing the judgement in your absence.

amarsreject

The insurance was involved at the time, but as I said it was agreed at the time that we wouldn't need to pay. Removing the CCj is not the issue, we're in discussion with the company to try and deal with it. What I want to know is how it can affect our application, and whether I should inform our mortgage advisor ASAP?

not_tonight_josephine_2

amarsreject wrote: »

Removing the CCj is not the issue,

Removing the CCJ would be the best solution for you even if you are happy to pay the money - if it was me I would be looking into the possibility of setting it aside given that you never received the court papers and thus had no opportunity to defend yourself.

If the CCJ remains on your record then I imagine it will have a major impact on your chances of getting a decent mortgage, especially at a 90% LTV. You should certainly tell your broker about it otherwise they may put forward applications to unsuitable lenders which will only damage your credit rating further. If your broker is fully aware of all the facts they will be able to tell you whether you have any options open to you

newrecruit

CCJ will come up in your credit search and ALL the lenders will carry out the search as a matter of routine.
It is worth informing your mortgage adviser and asking him/her to find you the best deal under the circumstances.
One alternative will be to apply to a county court to have the judgement set aside and have the case number issued by the court along with the hearing date, and have that info as a bargaining chip for better mortgage rate with the lenders that come forwards with an offer.

To set a side CCJ, it will take few months and the application will cost you 65 quid or free if you are on JSA.

You also be prepared to put your case forward.
You say that the hire company has gone into official receivership a long time ago, in this case,you might find that you owe no money to no one. It is worth finding out.

Conrad

No point applying for any mortgage at 90% ltv until the CCJ is fully removed (not just paid off). It's going to take time to get it removed / set aside.

Lenders are in no position to untangle whether a ccj was justified or not, afterall they were not privy to the procss and only have your say so of what went on, therefore it needs to be removed.

amarsreject

The underwriter checked us already and this didn't come up, presumably because it is under our previous address. Is the dealing to get it removed going to result in it being transferred to our current address, or do they not work like that?

newrecruit

Yes, seeking to remove CCJ will connect your current address with it.
It is curious as to why it did not show up in the credit search.
If you have not been honest about your previous address, CCJ can go unnoticed, but you are in danger of then having CIFAS filed against you if you get found out...CIFAS is a notification that you have committed a fraud whilst making a loan application.
CCJ will disappear after 6 years and some lenders will make you an offer with a CCJ, but NO ONE will touch you if you have CIFAS.
It is the best policy to declare your CCJ to the broker and see what he/she can get for you, or wait until CCJ is set aside by the County Court.