What to do if a court judgment has been entered against you

1 May, 2013
by: Cripps Pemberton Greenish

Sometimes, unfortunate circumstances or a reluctance to meet legal proceedings head-on can result in judgment being obtained against you or your company, which can have a serious effect on your future credit rating.  If you do find yourself in this situation, the following tips for action will help you to minimise the judgment’s impact upon you.

What if you dispute the judgment?

If you dispute the judgment entered against you and do not intend to pay the judgment sum, it may be appropriate for you to consider:

• making an application to set aside the judgment, for example if you did not receive the claim form; or
• appealing against the judgment if you consider that the judge has made an error. 

Both of these options need to be taken as a matter of urgency after judgment has been given, failing which you may lose your right to do so. 

Payment of the judgment sum

If you do not intend to contest the judgment, payment should be made swiftly in accordance with the court order.  This will avoid interest accruing and the possibility of the judgment creditor taking enforcement action against you, which will simply add to the amount you have to pay. 

If you cannot pay the whole amount of the judgment sum then you should consider contacting the judgment creditor to make an offer to pay by way of instalments. 

Register of Judgments

Once a judgment has been made by the court, details of the judgment will be submitted to the Register of Judgments, Orders and Fines for England & Wales, which is a publicly examinable register.  Its contents are routinely used in determining creditworthiness and for due diligence enquiries in respect of both individuals and companies.

Unsurprisingly, if judgment is recorded against you or your company on the Register, this can have significant consequences on your future dealings or ability to obtain credit.  Judgments entered in the Register remain there for six years, unless cancelled or set aside.  Even if you pay the judgment sum quickly, this does not automatically remove the judgment from the Register. 

Once payment has been made it would be wise to take the inexpensive and simple step of making an application to the court that made the judgment, for the judgment to be removed from the Register or marked as ‘satisfied’.   This is a step often overlooked in the rush to deal with the debt itself.

If payment has been made within one month of judgment being entered, you can apply for the judgment to be cancelled from the Register, removing its record completely.  If payment occurs after this period, you can apply for the judgment to be marked as ‘satisfied’.  This does not remove a judgment from the Register but ensures that it is shown as paid (it will remain on the Register for six years), which will limit damage caused to your credit rating.

Once an application has been completed, you will be provided with a Certificate of Satisfaction or Cancellation by the court.  This Certificate is invaluable evidence that the judgment debt is no longer outstanding, which you could rely on if your creditor seeks to dispute this or attempts to enforce the debt in the future.

How to avoid judgment

In all cases, the best way of protecting your credit rating is to deal with and try and resolve any disputes as soon as they arise.  If proceedings are issued against you, it is important to fully engage in the court process and, where appropriate, enter into a dialogue with the claimant.  If you admit that the amount claimed or some of it is owed, you should consider agreeing settlement terms at an early stage, which may include a repayment schedule.  Such action could avoid judgment being entered against you or your company altogether.