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If you fall into arrears with a credit agreement and come to no arrangements to repay your debt, a creditor may apply to the court for a County Court Judgment. This means the creditor is taking legal action against you in order to recover the monies owed.
Firstly, you will receive an Admission Form, or a County Court Claim form. This form gives you the opportunity to acknowledge you owe the debt, and requests information regarding your financial situation. On this form, you can make an offer of an amount you believe you can afford each month to repay the debt.
If you have been requested to repay the full amount, you can apply to the court to vary the order to a monthly payment you can afford. Filling in a N245 form, which can be obtained either from the court, or downloaded online, can do this. Generally there is a fee of £30 to be included with the Variation form; however, this can sometimes be waived if you are on a low income.
The N245 Varied Order form is your opportunity to inform the court of an offer of repayment you believe you can afford to pay each month. The court will pass the form onto your creditor for them to decide if the offer is acceptable or not, If the creditor refuses your offer, the court will take a look at your details and set a repayment the court believes you can repay. If the creditor accepts your offer, the order will be made for the amount you said you could pay.
A County Court Judgment will be registered on your credit file and will remain there for 6 years. However, if you repay the judgment before the 6 years are up, you can apply for a Certificate of Satisfaction. There is a cost of £10 for court fees. This will then be placed on your credit file that will be seen by any lender you use to apply for credit.
To prevent a County Court Judgment from being registered on your credit file, you need to repay the full amount requested within one month.
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