The difference between a CCJ and Defaults

Default’s and CCJ’s are both legal actions related to debt and payment obligations which have not been met. A default is a notice of intent to take legal action, whereas a CCJ is a court order that has been issued against a borrower who has failed to repay a debt.

A default is a notice that a lender or creditor sends to the borrower when they have failed to maintain the agreed monthly payments on an agreement or failed to meet a deadline for repayment. It is a warning that should not be ignored.  It means the creditor or lender intends to take further action unless the debt is repaid in full, or an agreement is reached. 

Although a default is not a court order, it can still severely impact your credit score and financial reputation and will remain on your credit file for 6 years.

When does a CCJ get removed?  As an actual court order that has been issued by a County Court against a borrower who has failed to repay a debt, a CCJ will stay on the borrower’s credit file for 6 years unless the CCJ is cleared within a month of the registration date. The court will set a repayment schedule for the outstanding agreed debt along with any additional charges like court fees and interest.  

If you are already a homeowner, a creditor or lender may apply to the court for a charge to be registered against the property. That charge will then stay on the title deeds until it has been repaid. If this happens the property can’t be sold or remortgaged unless the charge is removed. This will involve repaying the debt plus any interest that has been added.

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