How can company directors dispute a County Court Judgment (CCJ)?

A company director can dispute or seek to remove a County Court Judgment (CCJ) under the following conditions:

1. If the details on the claim letter are incorrect

2. If the goods are defective or the service level is unacceptable

3. If you want to file your own claim against the creditor

4. If you believe the creditor is responsible for the ongoing dispute

5. If you’ve paid the debt in full or partially

To challenge or remove a CCJ, you must submit a defence form.

Is it possible to remove or challenge a CCJ?

When a creditor seeks a County Court Judgment (CCJ) against your business, you might be able to challenge or remove it under certain circumstances. As long as the debt is in the name of the limited company, you should be shielded from personal court action.

For sole traders, it’s crucial to be aware of the ‘pre-action protocol.’ This mandates creditors, except possibly HMRC, to exhaust all avenues for debt recovery before resorting to court action.

Before delving into how you can challenge or remove a CCJ related to business debt, let’s delve into the background of this form of creditor action.


When can you challenge a CCJ?

Once you receive a letter of claim from your creditor, use the enclosed defence form to dispute the claim. If you believe you don’t owe all or part of the money, clearly indicate it on the form.

Acting swiftly in your defense and providing a clear explanation for your challenge is crucial. The ‘particulars of claim’ section outlines the debt, and you should address each disputed point.

Reasons for challenging a CCJ may include:

  • Making your own claim against the creditor
  • Defective goods or unacceptable service levels
  • Believing the creditor is responsible for the ongoing dispute
  • Having paid the debt in full or part, with incorrect details on the letter of claim 

Challenges must be legally grounded and supported by evidence. If unsuccessful, hefty court costs may apply, so seek professional advice before proceeding.


CCJs and the underlying risk to your business

When standard debt collection attempts fail, your creditor may turn to the court for assistance, seeking a judgment that orders you to pay. However, County Court Judgments (CCJs) come with additional risks you may not be aware of, including:

  • Creating difficulties in obtaining future business borrowing
  • Acting as a precursor to a winding-up petition against your business
  • Damaging your business credit rating and potentially your personal credit rating

So, is it possible to challenge a CCJ, and if so, under what circumstances?


Circumstances when a CCJ can be removed

If a judgment, possibly a ‘default judgment,’ has been made against you, it may be possible to have the County Court Judgment (CCJ) removed if you believe it is unjustified and can provide supporting evidence.

To remove or ‘set aside’ a CCJ, submit application notice N244, available online, along with a court fee. Essentially, you’re asking the court to set aside the judgment for specific reasons, and a hearing may be arranged where you can present your case.

Typical reasons for removing a CCJ include:

  • Incorrect following of the claim procedure
  • Unawareness of the creditor’s court action, possibly due to a change of address
  • An error in the County Court Judgment
  • Inability to defend the claim, such as due to illness

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When the court must remove a CCJ

Certain circumstances mandate the court to remove a default County Court Judgment (CCJ), including: 

  • Full payment of the debt, including interest and relevant fees/costs before the judgment
  • Returning the defence form or requesting more time to pay within the stipulated deadline

The court may also agree to set aside the judgment if clear grounds exist or if other relevant circumstances need consideration. 

If your business faces a letter of claim for an outstanding debt, seeking professional guidance promptly is crucial. Vanguard Insolvency, with extensive experience in challenging and removing CCJs, can provide advice on the best course of action for you. We offer free same-day consultations from our network of 100 UK offices.

Senior Partner at Vanguard Insolvency Practitioners | Website | + posts

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.