CCJ Dilemma - Please offer your advice

Kibo35

Dear Money Saving Experts,

I am writing to you to ask for assistance and advice as I have found myself in a bit of an unfortunate situation.

Long story, short. A couple of years ago, I was pushed out of a business I had co-founded with my ex-partner (legal dispute is still on-going). I found myself in a very difficult situation, financially and emotionally and let my financial situation collapse and my debt growing. I have been able to just about keep afloat with self-employment and occasional support from Universal Credit.

I have ignored calls from the credit card company, the debt purchasing company and their solicitors. I have just received a CCJ form (2 weeks ago). My debt (incl. court fees) is £8,000. I have signed the Acknowledgement of Service and have 10 days to get back with my reply to County Court.

In all honesty - I was hoping that I would receive a settlement offer before being escalated to a CCJ claim. I don't know why I thought that was a requirement. Perhaps I read it somewhere a long time ago, or perhaps it was wishful thinking. However, it happened with a smaller debt from AMEX last year, which I am paying off at 50% (15 months) which is manageable for me at this stage.

Last week, I have been speaking to the solicitors of the debt purchasing company and they might be interested in a settlement offer and have asked me for a number that they would be able to present to their client. Am I right in that they, in theory, could accept an offer and put aside/revoke the CCJ? A judgement has not been made yet.

I THINK that these are my options:

• Pay off my debt in full. This would remove the CCJ. Not an option due to insufficient funds.
• Receive a CCJ judgment with low instalments over a very long time. If I were to pay £50/month, it would take me just over 13 years! Is this even reasonable, the amount and timeframe?
• Discuss a settlement of 30% (£24K) OR perhaps 50% with a (24 monthly instalments). From my research and personal experience, I hope that these numbers are realistic.

I am a bit clueless of what the best thing would be to do at this stage? Can a settlement still be discussed AFTER a CCJ judgement has been made? Can it be altered if my financial situation becomes more stable? I am aware that a default has already been filed, and my AMEX will be partially settled by the beginning of next year. I know that my credit rating is completely shattered for some time. It's already bad (understatement), so I guess a CCJ won't make much of a difference at this stage..?

Sorry, it's a lot of information. I am a bit unsure of what to do and how best to manage this situation and what alternatives I have at this stage. This should have been taken care of more responsibly a long time ago, but "life happened" and in all that misery other priorities took precedence. Does anyone have any advice or experience in dealing with a similar situation?

Thank you so much. I have already gained a lot of confidence from the community and other threads on this forum and am very grateful for all of you here.

Kibo 

sourcrates

You say the debt is 8k, so where does the 24k come from ?

You can make a settlement offer, but that may not stop the action from progressing.

Judgements for consumer credit debt are rarely enforced further by creditors, you can pay monthly according to your budget, I assume you don`t have any defence to the claim ?

fatbelly

30% is 2.4k, i.e.£2400. Do you have £2400 as a lump sum? Even so, i doubt that would be enough at this stage.

Is payment over 13 years considered reasonable? Generally, no. Courts would expect 3-5 years to be reasonable.

As you have already indicated you will defend/part-defend this claim, i suggest that you follow through and at least slow them down.

I think Legal Beagles has some useful template defences

pramsay13

I assume OP means £80,000 

fatbelly

pramsay13 said:

I assume OP means £80,000 

On a credit card!?

Kibo35

sourcrates said:

You say the debt is 8k, so where does the 24k come from ?

You can make a settlement offer, but that may not stop the action from progressing.

Judgements for consumer credit debt are rarely enforced further by creditors, you can pay monthly according to your budget, I assume you don`t have any defence to the claim ?

Soucrates, thank you for your reply. It was a typo - my debt is £8,000, and I thought a 30% - £2,400 - one-off payment might be a good first offer.

Would you specify what you mean with regards to "judgements are rarely enforced"? Even with a CCJ judgement against me, in a case where I wouldn't be able to pay my monthly instalments, no further action would be taken (apart from the regular "harassment"?). I, of course, wish to get this all solved in the best way possible.

I do not really have any valid defence, no. Thanks again.

Kibo35

fatbelly said:

30% is 2.4k, i.e.£2400. Do you have £2400 as a lump sum? Even so, i doubt that would be enough at this stage.

Is payment over 13 years considered reasonable? Generally, no. Courts would expect 3-5 years to be reasonable.

As you have already indicated you will defend/part-defend this claim, i suggest that you follow through and at least slow them down.

I think Legal Beagles has some useful template defences

Thank you fatbelly.

I could pay £2400 in a lump sum, yes. Thank you for clarifying the expected timeframe for paying. I am able to, myself, put in the amount to pay in monthly instalments (the form does not mention time frame). Considering my situation, which currently is not very stable, are the court able to decide their own recommended amount? For instance, if I say I can afford to pay £50/month, can the judgement say I am to pay £150/month etc.?

I do not really have any defence, but I spoke to the County Court and said that I needed more time to assess the situation, my finances etc., so I filled in the Acknowledgement of Service, stating that I intended to defend the claim. I was told that I would still able to fill in the admission form and agree to the claim in full, without prejudice. Hope this helps. 

Thanks again.

Kibo35

pramsay13 said:

I assume OP means £80,000 

Just to clarify: £8,000.

pramsay13

if you can pay £50 per month you will have it paid off in 16 months rather than 13+ years.

fatbelly

160 months = 13 years 4 months

If you offer that on the form and the other side does not respond, then that order is made automatically

sourcrates

Judgement amounts are usually made according to your budget and disposable income, so make sure you don`t show too high a figure, if the monthly payment is set too high, you can re-apply to the court to reduce it.

This won`t really be of much help to you, but you don`t mention who the creditor is or which solicitor, but Lowell for example, mostly operate there entire collection strategy on a numbers basis, the accounts they choose to litigate on, and win, are not normally pursued further if the client does not pay.

The judgement just sits there until the 6 years are up.

They rely on the majority of clients continuing to pay, those who don`t are seldom pursued further.