If it has never happen to you before, being threatened with court action can be very frightening. However, there is no need to panic. Once you understand the process, you could actually use it to your advantage.

What does court action mean?

Creditors and collecting agents will often threaten to take you to court for the non payment of debt. But what does this actually mean?

If creditors are unable to collect the money you owe them, they can apply to the Court to take out a County Court Judgement against you. This is also known as a CCJ.

A CCJ is basically a court ruling confirming that you owe the money and that it must be repaid it a particular rate and within a particular time.

If you owe the money claimed, there is actually an advantage of having a County Court Judgement. Once the judgement is in place, if you maintain the payments, the creditor can no longer chase you for money.

More importantly, no more interest or charges can be added to your account.

Completing the paperwork

You will not actually have to go to a court. Everything is done by post.

If you agree that you owe the money which is claimed, you must complete the “Admission” part of the form. This allows you to state your income, reasonable living expenses and what you can offer to repay towards the debt each month. You should then return the form.

It is likely that the court will then issue a judgement based on what you can afford to pay.

Do not ignor a county court claim

The most important thing to do if you receive a county court judgement claim in the post is do not ignore it. If you do, the court will automatically assume that you owe the money and will probably request that you pay back an unrealistic amount each month.

It is much more difficult to change the amount you have to pay in a Country Court Judgement after it has been issued. It is far better to give the court the correct information to work with in the first place by returning a correctly completed form.