Sharp rise in county court judgments against consumers

The number of county court judgments (CCJs) registered against consumers has hit a record high, according to official figures that show that an increasing number of people will have problems getting a mortgage, credit card or bank account in the future.

A CCJ is a type of court order in England, Wales and Northern Ireland that any company can apply for a court to register against an individual if they fail to repay money that they owe.

In 2016, a total of 912,389 judgments were registered against consumers in England and Wales – an increase of 24% on the 734,205 registered in 2015, said Registry Trust, which operates the Register of Judgments, Orders and Fines for England and Wales on behalf of the Ministry of Justice.

It added that this was the highest number on record, and that 2016 was the fourth consecutive year in which the total number of CCJs had risen.

By contrast, the number of CCJs against businesses in England and Wales fell by 21% to 78,739 in 2016 – the lowest level on record. There have been claims that businesses trying to recover money owed to them are being priced out of court because of new fees.

A CCJ is removed from the register if it is paid in full within one calendar month of the judgment date, but will otherwise remain there for six years.

If someone receives a judgment, this means the court has formally decided that they owe the money. “This record can seriously affect your ability to get a mortgage, a credit card or even a bank account in the future,” said the Money Advice Service, a website set up by the government.

In 2016, there were 15.77 consumer judgments per 1,000 people, compared with 12.79 the year before, said Registry Trust. However, the average value of a consumer CCJ fell by 16% to £1,711. In 2008, the average value of a judgment stood at £3,624.

Meanwhile, the total value of debt judgments against consumers in all courts in England and Wales during 2016 was £1.7bn.

The new data could imply that growing numbers of people are struggling to cope financially. However, Registry Trust chairman Malcolm Hurlston said: “Taking together the increasing number of judgments and their declining value, we see that people whose commitments may be out of control are being identified earlier in the lending cycle.”

He added: “The increasing number of CCJs shows that more responsible lending is having its impact.”

Consumers with one or more CCJs registered against them may struggle to obtain a mortgage from a mainstream provider, but there are a number of so-called sub-prime lenders catering for people who have had credit issues, such as CCJs against them. However, these mortgages often come with a hefty price tag.

Source: The Guardian