If a county court judgement has been issued against you by one of your creditors, we consider whether this debt can be included in a debt management plan.
If you are struggling to pay your debts it is possible that you will want to consider using a debt management plan to reduce the payments you make to a more affordable level.
However, if one of your creditors has already taken legal action against you and the court has issued you with a County Court Judgement (CCJ), you are legally obliged to pay this debt as ordered by the judgement.
You cannot simply include the debt in a DMP and reduce the required payment.
A DMP is an informal agreement and if one of your creditors has already issued a CCJ against you, they do not have to accept a revised offer that you make through your DMP.
Consequences of not paying a CCJ
If you ignore a county court judgement and just pay the amount that you can afford based on your debt management plan, you will automatically break the terms of the CCJ.
If this happens your creditors then have the option to take further legal action against you.
If you are a home owner, this could involve the application for a charging order against your property. Alternatively your creditor could apply for an attachment of earnings so that the CCJ payments are taken directly out of your wages.
For this reason, if you already have a CCJ and want to start a DMP, you must make provision to pay the full CCJ payment and divide the remainder of your disposable income amongst your remaining creditors.
If this is not a viable solution because you simple do not have enough left to offer a sensible payment to your remaining creditors, will need to apply to change your CCJ payment.
Changing a CCJ payment
Changing a county court judgement so that the payment fits into your debt management plan is possible.
However, to do so you need to make a formal ap plication to the Court to change the payment structure using an offic ial application form (N245).
The court will review your application and if they agree that the payment amount should be changed, they will issue you with what is known as an instalment order.
You can then start making this new payment as part of your DMP.
No legal protection
If you start to use debt management plan, this does not give you legal protection from your creditors.
This means that although they can chose to stop further collection actions against you, they are not legally obliged to do so.
As such, even if you are in a DMP and making your monthly payments as per the plan, any of your creditors can still decide to apply for a county court judgement against you.
If this happens it is extremely important that you correctly complete the admission form that you will receive from the court. This will ensure that the court is informed about your financial circumstances and can set the CCJ payment order at a level which fits into your plan.
If you are working with a debt management company they will be able to help you complete an admission form if you receive one.
Choosing the right debt solution
Because a county court judgement cannot be automatically be included in a debt management plan, you need to plan carefully if you want to use this type of solution and a CCJ has already been issued against you.
You will need to make sure that you can maintain your CCJ payment by allowing a sufficient part of your disposable income to cover this.
However, if by doing this you have not got enough disposable left to make sensible payments to your remaining creditors, you will need to apply to get your CCJ payment changed.
Alternatively you could consider a different debt solution which will legally bind in all of your creditors including any CCJs.
One such option is an individual voluntary arrangement which will include creditors even if CCJs have already been issued.
Related DMP articles
If you are interested i n reading more expert articles about debt management plans, please click on the following link:
http://www.beatmydebt.com/forum/viewforum.php?f=49
What to do next
If you are struggling with debt, visit beatmydebt.com
Our experts are available to speak to you about your debt problem and offer advice and solutions.
Our vibrant debt forum gives free access to experienced industry experts and others who have suffered with debt problems.
Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.
James Falla is a debt adviser from BeatMyDebt.com in the UK. For more quality and unbiased information on Debt Management Plans, visit our website at http://www.beatmydebt.com
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