The Registry Trust has recently raised some sensible proposals that would help make the data on CCJs more accurate and perhaps help those who have CCJs, to repair their credit more quickly. In short, it is proposed that part payment of CCJs ought to be recorded in some way to make the data more accurate and representative.
As a reminder, the Registry Trust maintains the Register of judgments, orders and fines on behalf of the Ministry of Justice. If a CCJ is entered by the court, it ought to be registered with the Registry Trust by the court notifying it automatically. Credit reference agencies will search the register and include the data in their reports and scoring.
As things stand, the record relating to a CCJ can only be updated with a certificate of cancellation or certificate of satisfaction, after the CCJ has been paid in full. Part payment of CCJs is not recorded or updated at all.
This therefore does not discriminate between those who have not paid a penny against a CCJ and those who are perhaps paying it off by installments over time. The Registry Trust suggests that there ought to be a register of partial settlements and payments.
Not only would this record what sums have been paid against a CCJ balance, but it could also perhaps show where the creditor has accepted a lesser sum in full and final settlement of the liability. For example, a creditor may accept a lump sum payment for a lesser amount (perhaps funded by a family member), rather than being drip fed a small amount each month until the balance is eventually paid (a bird in the hand being worth more than two in the bush).
If Part Payment Of CCJs Benefitted A Debtor’s Credit, It Might Encourage A Debtor To Make Payments
This might encourage those with CCJs to start to make payments to reduce the balance if they know that it may improve their credit rating. As it stands, it is only once the balance has been paid in full that any action can be taken to apply to court for a certificate of cancellation or certificate of satisfaction to update the records relating to the CCJ. Payment in full might be unachievable for years and therefore not terribly motivating to chip away at the balance in the meantime.
As a reminder, if the judgment sum is paid in full within a calendar month, a certificate of cancellation can be obtained removing all record of the CCJ from the Register of judgments (which is searched by the credit reference agencies).
A certificate of satisfaction can be obtained if the judgment sum is paid in full but outside of the one calendar month period. In those circumstances, the record of the CCJ remains in place but it is marked as paid. Clearly, it is better to obtain a certificate of cancellation if at all possible as that removes all trace of it.
A Lack Of Understanding That It Is Possible To Obtain A Certificate Of Cancellation Or Certificate Of Satisfaction
Many people do not know that it is necessary or even possible to send the certificate application to court to either seek a certificate of cancellation or certificate of satisfaction, after the CCJ has been paid in full. It ought to be more more obvious for those subject to CCJs as to what steps they need to take once a judgment has been paid in full and perhaps an obligation upon commercial entities ought to be imposed that they notify an individual upon payment of a CCJ of the necessity of applying to court for a certificate (making it clear that it is not something the creditor does on the debtors behalf).
It could be pushed further to put the obligation under the creditor to update the Register to notify that payment has been received in full and to issue the appropriate certificate.
We support the idea of a register to record part payment of CCJs which would be good for both debtors and creditors. The debtor being able to show the balance is reducing could improve its credit rating, which in turn could motivate the debtor to make payments to the creditor. How this would be paid for however, and mechanics as to how the updates would happen, needs to be worked out.
In relation to the lack of understanding and knowledge about the certificate of cancellation and certificate of satisfaction process, is something the court service perhaps could bring to people’s attention more clearly, for example by enclosing a leaflet with easy-to-understand language along with better and easier to find online resources.