Increase in County Court judgements in the UK
The UK has seen a dramatic rise in the number of county court judgements, reflecting the level of bad debt amongst consumers.
According to recent reports last year saw a steep rise in the number of people that had county court judgements registered against them, with nearly 850,000 consumers having CCJs registered against them. This is the second consecutive year that this figure has risen, and in 2006 the figure was a third higher than the previous year.
A county court judgement, or CCJ, is a legal process followed by lenders trying to recover or lay claim to money owed to them. A CCJ can end up in bailiff action being taken, or may result in the lender being able to lay claim to the debt by securing it against the borrowers property. Recent reports indicate that lenders are now filing for CCJs at an earlier stage in the debt recovery process to improve their chances of getting back the monies that they are owed.
One official stated: 'Judgments are an important item in creditors' armoury, particularly for dealing with people who are 'won't pays' rather than 'can't pays' and the sharp rise indicates that it is creditor behaviour that is changing. Creditors are seeking judgments as the necessary first step to obtaining charging orders against debtors' properties, thus securing their share in any equity. It is a further warning to homeowners who may have borrowed too heavily on top of rising interest rates and escalating house prices.'
A CCJ stays on the credit file of the borrower for six years, even if the debt is paid off within that time (unless it is paid within a month of the issue of the CCJ). Bad debt levels in the UK soared over the past year, breaking the one hundred thousand barrier for the first time.
Tom Smith
30th May 2007
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