It can be done but you have to act quickly

If you’ve received a County Court Judgement (CCJ or a Decree under Scottish law) against your business (or if you’re a sole trader against you) then you might be concerned, worried or even frightened. 

Don’t panic – while it has to be taken seriously and dealt with quickly and properly, there are some steps you can take immediately to potentially stop it in its tracks.

One of the local courts in the UK has found that you legally owe a debt to a creditor and that it has to be repaid, usually within 30 days of the judgement being awarded. 

Stay of execution

A dramatic sounding but powerful legal procedure exists called a “stay of execution” that will suspend a CCJ while a payment agreement is considered or leading to a full hearing over when a debt is due to be repaid. 

If your business has received a CCJ, you accept that it is for a lawful amount and is due but cannot reach an informal agreement with high court enforcement officers then you are eligible to apply to the court for a stay of execution while this option is fully and legally explored.

A specific legal form – N245 – is used to provide your business with a payment instalment plan if agreed by the creditor.

Informal arrangements can also be made if all parties agree and is a quicker process than submitting an N245 form but the full cooperation of creditors and high court enforcement officers is required. 

Challenging a CCJ

CCJs usually have to be responded to within 30 days and this may be missed for various circumstances and reasons including:-

  • The CCJ was served at an old business address
  • The CCJ was served while the principal was away from the legal business address
  • Your registered office is with your accountant or another authorised third party and they were unable to send the documents in time
  • You did not understand or know how to respond in time

If you feel you have grounds to formally challenge a CCJ against your company then the first step is to do so at the same county court where the original judgement was first submitted. 

You must pay a fee to set aside the judgement and you would need to complete an N244 form. You must also provide specific information and evidence as to why the debt is not due.

If the creditor has already employed bailiffs or high court enforcement officers then you will generally need to produce a stay of execution application (N245) if they attend your premises to recover assets.  Always keep a copy available. 

Also note that while some HCEO’s may agree not to proceed further pending the application, there is no formal stay until it is granted and ordered by the court. 

What to include

The contents of the stay of execution will vary depending on the specific reason you are relying on to obtain the stay. 

In every application pending consideration of a payment agreement, you will have to complete form N245 which contains an income and expenditure assessment setting out exactly what you may be able to afford in repayment. 

You should also ask for an interim stay of execution with any application. This will mean that high court enforcement officers cannot take any action while you wait for the court to decide whether your payment agreement is acceptable to them. 

In a small claims court, this will often be dealt with without a personal hearing and will instead be dealt with by correspondence. 

The judge will request confirmation from creditors as to whether the payment arrangement is acceptable and may request further evidence of your means to pay. 

Once they take all of this evidence into account, they will then decide whether you should be allowed to make payments in instalments or if they feel you can pay the debt in full, they will make the order accordingly. 

If you used form N244 to dispute the debt then you need to provide as much information and evidence as possible as to why you don’t owe it. 

This should include a full defence including a witness statement with documentary evidence as to why the debt is not due. Again, you should also request an interim stay of execution pending the hearing.

The court will then provide a date when you must attend court in person if the judgement is to be set aside. If the CCJ was granted in default and you can persuade the judge that there may be a reason that the debt is not due then it’s likely that the CCJ will be set aside temporarily and the stay of execution granted pending a full hearing. 

Next steps

If the court grants an order sought through form N244 then it’s likely that the CCJ will be temporarily set aside pending a full hearing where you will have to provide a full defence with evidence as to why the debt is not due. 

Similarly, if the court accepts a payment plan submitted through form N245 then every payment must be made in full and on time or high court enforcement officers will be able to attend your business premises to recover the full balance or items to be sold to reach this. 

If the stay of execution isn’t granted for whatever reason; you’re unable to pay the debt in full or meet a repayment plan in instalments then you will still have some options available to you. 

Depending on the individual financial circumstances of your company, an insolvency solution such as an administration, a CVA or voluntary liquidation could also all be the right solution.

We’ll be happy to work with you to create the most efficient and effective plan to deal with the CCJ and any other financial problems or arrears you have including outstanding bounce back loans, but only if you reach out at the earliest opportunity. 

Time really is of the essence so make the most of it and get in touch for a free call today.