What Are CCJs And How Do They Affect My Mortgage?
Basically in British law, someone you owe money to like a mortgage lender or a credit card provider can take a County Court Claim against you to try and get their money back. Under Scottish law claims are dealt with differently, by the Sheriff Court, but the process is much the same. If you pay the amount outstanding straight away, you can avoid a hearing or judgment and you will not get any CCJs on your record. If you can’t, there will have to be a small court hearing in private. If you are found to actually owe the money, you will receive CCJs, or judgements ordering you to pay. The court doesn’t find anyone guilty or innocent as such. It looks at the facts and decides whether you owe any money, and if so, how you should repay it.
CCJs are not criminal records. They are not going to put you in prison if you owe a lender money. But they are real reminders that you might have debt problems. Usually CCJs are not quick decisions – lenders will try long and hard to get the money from you personally before going to court. You don’t even have to go to the court yourself, just post all your information and wait for a hearing. But once you have a CCJ, your credit record will be changed for good.
A lender sees CCJs on your record and knows you had trouble paying debt in the past. It knows that you had to be told by a Judge to pay an outstanding debt. In a lender’s eyes this does not make you a good borrower, it makes you a high risk. This means it will be harder for you to get hold of a mortgage, and even then you may have to resort to a subprime mortgage. Anything that is detrimental to your credit score like CCJs will always have knock-on effects in the future.
But just because you have CCJs does not mean you cannot get home finance at all. With the help of a financial adviser you will be able to turn things around and start meeting debt each month. An adviser will also try and find you the best mortgage possible, regardless of your CCJs, so you can start cleaning your credit with a roof over your head.