CCJ Against Company Debt: What Happens if You Can’t Pay

By Steven Wiseglass, Licensed Insolvency Practitioner | [date] | Corporate Recovery & Insolvency

A County Court Judgment (CCJ) against company records stays on the register for six years from the judgment date. The one exception is payment in full within one calendar month, which removes the judgment from the register completely

What happens next depends almost entirely on one thing: whether the company can pay it. If it can, this is an administrative problem with a clear route through. If it cannot, the judgment becomes the foundation for everything a creditor does afterwards.

What is a CCJ Against a Limited Company?

A CCJ against a company is a court order confirming that the company owes a creditor a specific sum. The judgment sets out four things: how much is owed, how it must be paid, when payment is due, and who to pay.

Once judgment is entered, the details go to the Registry Trust, the not-for-profit body that maintains the Register of Judgments, Orders, and Fines on behalf of the Ministry of Justice. Credit reference agencies take their data from that register, which is how the judgment reaches your company’s credit file.

County Court judgments stay on the register for six years from the judgment date. The only exception to this is when payment is received, in full, within one month of being issued. This ensures that the judgment is removed from the register entirely. 

A CCJ is not recorded at Companies House. It sits on the Register of Judgments, Orders and Fines, which is maintained separately by the Registry Trust, and credit reference agencies take their data from there.

How Does a Company End Up With a CCJ?

A CCJ against a company is issued when a creditor files a claim at court, usually after earlier attempts to collect the debt directly have failed. Prior to being issued, the court sends a claim form to the company, which has 14 days to respond. 

There are two separate deadlines at this stage in CCJ proceedings: 

1. Fourteen days to respond to a claim form. 
2. One calendar month from judgment to payment in full to facilitate removal from the register. 

Ignoring the claim form is how most company judgments arise. If the company does not respond within 14 days, the court can enter judgment in default. That means judgment is granted automatically, with no hearing, no assessment of whether the claim is fair, and no opportunity for the company to put forth its side.

This is why directors often find out about a CCJ against company records only when a credit check flags it, or when enforcement action starts.

What Happens Next if a CCJ Goes Unpaid?

An unpaid CCJ does not expire quietly or disappear on its own. What happens next is that the judgment stands, and the creditor can move to enforcement whenever it chooses. In the meantime the entry sits on the public register, where lenders, suppliers, and potential customers can freely see it, likely affecting the business’s reputation.

It’s crucial to understand that ignoring a CCJ does not make it go away. The judgment stays valid and enforceable for six years, and a creditor can act on it at any point in that window. Nothing about the passage of time works in the company’s favour here.

As a result, the commercial damage of a CCJ often comes before the legal consequences do. Suppliers running routine credit checks may withdraw offered payment terms and instead request cash up front, refinancing becomes much harder and more expensive, and existing lenders may request personal guarantees or additional security before extending existing terms further.

What CCJ Enforcement Action Can a Creditor Take Against Your Company?

Enforcement is where a CCJ against a company starts to bite. The judgment alone recovers nothing, so the creditor has to choose a method and apply to the court for it. Four routes are available: a warrant of control, a writ of control through the High Court, a third party debt order against the company’s bank account, and a charging order over company property.

Which route a creditor takes depends on the size of the debt and what the company owns. The enforcement action available following a CCJ against your company is as follows:

• • Warrant of Control: CCJ bailiffs, formally county court enforcement agents, attend the company’s premises, take control of goods, and sell them to raise the debt. This route stays in the county court and is usually slower.
  • Transfer to the High Court: Where the judgment is £600 or more, the creditor can transfer it to the High Court under section 42 of the County Courts Act 1984. High Court Enforcement Officers then attend, and they act faster (and have wider powers) than county court bailiffs.

• Third Party Debt Order: The court orders the company’s bank to pay the creditor directly out of the company account. The funds are frozen when the order is made, which can stop the business trading overnight.

• Charging Order: The debt is secured against property the company owns, so it has to be repaid when that property is sold or refinanced.

Can a Creditor Wind Up Your Company Over a CCJ?

A creditor can wind up a company over a CCJ. This is where a CCJ against a company stops being a credit problem and becomes a threat to the company’s existence.

What makes a judgment so significant at this stage is what it takes away from the company. Its defence.

Before judgment, a company facing a winding-up petition can argue that the debt is being disputed, and the court will not usually wind up a company over a debt that is genuinely in dispute. Once judgment has been entered, though, that argument is gone. The court has already decided the money is owed.

Additionally, a judgment the company cannot pay works against it a second way. Under section 123 of the Insolvency Act 1986, a company is deemed unable to pay its debts where execution on a judgment is returned unsatisfied, meaning enforcement was attempted and recovered nothing. An unpaid CCJ followed by failed enforcement is evidence of insolvency, not simply evidence of a debt.

The threshold is lower than most directors expect. A creditor owed £750 or more can petition to wind up a company. Many creditors serve a statutory demand first, giving the company 21 days to pay. That figure was temporarily raised to £10,000 during the pandemic and reverted on 1 April 2022, though plenty of businesses still believe the higher figure applies.

HMRC petitions more companies than any other creditor, and an unpaid judgment is one of the most common routes that leads to their door.

Are Directors Personally Liable for a CCJ Against Your Company?

A company CCJ is registered against the business, not against you. Directors are generally not personally liable for a CCJ against company debts, because the company is a separate legal entity and the debt belongs to it.

However, personal exposure can arise in specific ways that are separate from the judgment itself. If, for instance, you signed a personal guarantee for that debt, the creditor can pursue you personally under the guarantee regardless of the company’s existing position, unless the guarantee itself can be challenged.

If the company later enters liquidation, the liquidator examines director conduct, and claims for wrongful trading, fraudulent trading, or misfeasance can follow where the evidence supports them.

The practical point here is that continuing to trade after a judgment the company cannot pay is exactly the period a liquidator later looks at closely.

Can you Still be a Company Director with a CCJ?

A judgment against your company does not disqualify you from acting as a director. Disqualification is a byproduct of findings about your conduct as director, not a result of a CCJ against your company. 

What can lead to disqualification is what happens afterwards. If the company goes into liquidation and the investigation into director conduct finds wrongdoing, disqualification proceedings can follow. The judgment is not always the problem. How you responded to it may be more of an issue. 

What Should you do if your Company has a CCJ?

Upon receiving a CCJ, the first thing you should do is check whether the judgment is correct. If the company never received the claim form, or does not owe the money, you will be eligible to apply to the court to have the judgment set aside using form N244. 

If the debt is valid, and the company is able to pay it, full receipt of funds owed within one calendar month removes the judgment from the register. Paying later will not remove it, but the company can apply using form N443 for a certificate of satisfaction, so the register shows the debt as settled. 

If full payment is not immediately possible, the company can ask the court to vary the judgment in order to pay what is owed via instalments, or negotiate a settlement with the creditor.

If the company cannot realistically pay the judgment, the problem is no longer the CCJ. It is the position underneath it.

A judgment the company cannot satisfy usually means the debts have outgrown what the business generates. Under section 123, an unsatisfied judgment is evidence of insolvency, so the company is likely to meet the legal test whether or not anybody has used that word yet.

Once a company is insolvent, directors’ duties change. Your obligation shifts from the interests of shareholders to the interests of creditors as a whole. In practice that means not taking on credit the company cannot repay, not paying one creditor ahead of others, and not continuing to trade in the hope that the situation suddenly resolves itself. Every one of those decisions will be seriously examined if the company later enters liquidation.

That said, options do still exist at this point, and the ones that remain depend on the company: 

• A Company Voluntary Arrangement can restructure the debt where the underlying business is viable. 
• Administration creates breathing space while a rescue or sale is worked out. 
• A creditors’ voluntary liquidation closes the company on the directors’ terms. 

What those routes have in common is that they need to be started before a creditor petitions, because after that the decision is no longer yours.

Speak to a Licensed Insolvency Practitioner Today

If there is a CCJ against your company and you cannot pay, the sooner you get specialist advice, the more options you will have open to you. 

A judgment the company cannot satisfy is usually a sign that the debts have outrun the business, and every stage that passes after that removes another route.

At Inquesta, Steven Wiseglass is a Licensed Insolvency Practitioner regulated by the IPA with over 20 years’ experience advising directors in this challenging position. We will assess where your company stands, explain what each option means for you personally, and set out what is still available, including a creditors’ voluntary liquidation on your own terms rather than waiting for a creditor to petition.

Fill in our contact form today to request a callback from a member of our specialist team. Alternatively, call 0800 093 4604 or email [email protected]