When you enter into a formal debt solution, you must make regular payments towards your unpaid debt until your term comes to end.
When you have fulfilled the terms of your agreement, you will no longer be obligated to make payments and may even be declared debt-free.
But how do future lenders know you have repaid the debt and, more importantly, how can you prove that you don’t owe any more money?
This is where a Certificate of Satisfaction comes in.
This guide will explain everything you need to know about a Certificate of Satisfaction including what a CCJ is, how a CCJ works, where your CCJ will be visible, what a Certificate of Satisfaction is, how to apply for a Certificate of Satisfaction, and how to remove a CCJ from your credit record.
What is a CCJ?
A County Court Judgment (CCJ) is a high court judgment a creditor may issue against you if you have unpaid debts.
While County Court Judgments are fairly common, creditors will usually only take such serious action if they have failed to recover the debt through other means and believe they won’t receive the money they are owed otherwise.
How does a CCJ work?
Letter of claim
If a creditor has applied for a CCJ, you will be notified via a letter of claim sent to your home address.
This document will outline how much you owe, who you owe it to, and how long you have to pay the full or partial balance.
You must respond to this letter within 30 days of the date you received it stating whether you wish to pay or challenge the claim.
Default notice
If you don’t respond or have been unsuccessful in coming to an agreement with your creditor, you will receive a default notice.
This is essentially a warning of legal action being brought against you if you don’t repay what you owe.
Under the Consumer Credit Act, you must have received a default notice 14 days before legal action can begin.
Claim form
If you still can’t reach an agreement with your creditor, they will issue a claim form. This will let you know what legal action is being taken and what your options are.
Ignoring the claim form will result in the CCJ going ahead and you may be forced to make unaffordable payments because you didn’t reach out to discuss your financial circumstances beforehand.
For example, you might be asked to repay the amount owed in full despite not being able to afford it.
Where will my CCJ be visible?
When you enter into a CCJ, it will be visible on each of your credit records for a total of six years from the date it was approved.
During this time, your credit rating will be lowered and you may find it difficult to obtain credit.
It will also be noted on the Register of Judgments, Orders, and Fines from the Registry Trust for six years from the date of issue.
This is a public register with information on every debtor that has a judgment, order, or fine issued against them.
While it is publicly accessible for a small fee, it is usually only viewed by banks and loan companies when deciding whether to approve credit products.
What is a Certificate of Satisfaction?
Once your judgment debt has been repaid in full, your CCJ will be marked as satisfied and you will no longer be required to make payments.
At this stage, you can apply for something known as a Certificate of Satisfaction or Certificate of Cancellation from the court.
This is essentially a certificate proving that you have made the necessary payments towards the court order and no longer owe money to the creditor.
There is usually a court fee of £14 to obtain the certificate but it can be worthwhile to prove to future creditors that although you had a CCJ, you stuck to the terms of your agreement and repaid the full amount you owed.
How do I apply for a Certificate of Satisfaction?
The process of applying for a Certificate of Satisfaction is very straightforward.
Here is what you can expect when you apply for a Certificate of Satisfaction:
Fill in an N443 form
The first thing you must do is download and complete an N443 form. This is a short document that explains that the debt has been paid in full.
Before you send it to the court, you must also enclose any evidence that would prove the debt has been paid, such as a receipt or bank statement.
This is why it’s always a good idea to keep a record of all documents and bank statements during your CCJ.
Send it to the court
Once you have filled in the form with the right information, you must send it to the court via email or post.
The court will then assess the evidence given and decide whether you meet the eligibility criteria. If the court believes you have paid the debt, your certificate should be processed within a few weeks.
Can I remove a CCJ from my credit record?
If you repay the full amount owed in your CCJ within 30 days of receiving it, it will be wiped from your credit record.
It will also be removed from the Register of Judgments, Orders, and Fines, meaning nobody will know you ever had a CCJ.
If you have paid within 30 days but the CCJ is still on your credit record, you must contact the relevant credit reference agencies and ask them to update their records.
However, if you ignore the CCJ or pay after one calendar month has passed, it will be marked as satisfied but remain on your credit record and the register for the remainder of the six years.
It is not recommended to ignore a CCJ and simply wait for it to be removed from your credit file. During this time, your creditors can still take further legal action against you.
