• There is much debate about credit repair companies.

• Can they remove CCJ’s?

• Can they get the money owed on a CCJ reduced?

• Lets start at the beginning.

1. You do not pay a bill, a loan, an invoice etc
2. You receive a formal demand for payment from the creditor *
3. You ignore the demand
4. The creditor sends you a ‘Claim Form’ (previously a Summons) demanding payment within 14 days or your defence in writing (following court rules)
5. You ignore the Claim Form
6. The creditor asks the court to enter a Default Judgment (the CCJ) **
7. The court send you the CCJ giving you 28 days to pay ***
8. You ignore the CCJ
9. When the 28 days expire, the CCJ will be on your record for 6 years ****

Notes:

*	The demand must say who you are, delivered to where you live (or work), who the creditor is, their address, how to contact them, what is owed, what it is owed for, when you must pay the amount by and what will happen if you do not pay i.e. “if you do not pay £100 by 12/11/99 we will take legal action”.
**	When the Defendant (debtor) does not reply to the Claim Form (previously Summons) the court enters a ‘Default Judgment’. The term Default means you defaulted on your opportunity to respond to the creditors claim.
***	If you pay within the 28 days the CCJ is not recorded if you contact the court
****	On the sixth anniversary of the date of the Judgment the CCJ will automatically erase from your credit record.

• Now back to the credit repair.

• The fundamental issue with all credit repair opportunities is did you receive the Claim Form (previously Summons). If you did, you cannot remove the Judgment. However, this is not the end of the matter with most (but not all) credit repair companies.

• If you are prepared to state that you did not receive the Claim Form (previously Summons), and you have a reasonable reason why you did/could not receive it, you have the grounding for a successful credit repair.

• You will complete a few forms with the credit repair company and make an application to set aside the ‘Default Judgment’.

• You cannot set aside a CCJ that you knew about, did not pay, but can pay now. However, credit repair companies may correspond with a company that secured a CCJ against you, say, 3 years ago, for £7,000 and offer them, say, £4,000 if they not object to a credit repair and application to set aside the Judgment Default of their CCJ.

• If you have paid off a CCJ that is 3 years old the credit repair company cannot use the leverage of paying the creditor some money not to object to the credit repair: the credit repair company relies on the creditor not being bothered to object.

• Credit repair companies are most effective if you have not paid any money towards the CCJ.

• If you settle a debt after the first 28 days, the CCJ will not be taken off the register. The file can be marked as ‘satisfied’, if you apply to the court.

• A further problem can exist on your credit record that is as destructive as a CCJ: a ‘Default’. If you miss two to three payments of an agreement (Hire Purchase, Lease) the creditor can send you a formal default letter. A CCJ and a Default are both regarded as serious information by lenders etc. You cannot pay or satisfy a Default: it is just there! An inexperienced clerk at a finance company can send a Default to you without any supervision or serious default.

  My Personal Summary:
  

• The credit repair companies are under immense pressure from government, credit counsellors, finance companies and institutions: and of course the main credit reference companies who rely on poor credit ratings to earn profits – at times it is difficult to see who the ‘goodies’ are!

• Should someone who went through a very difficult time in the past have the opportunity to correct his or her standing in life before a 6-year term? I know of many such cases where debt had very little to do with recklessness, and more to do with such things as poor health, redundancies etc.

• Banks and finance companies use computers to sort the good from the bad. With CCJ’s lasting 6 years (and the computer treating a 1-month debt the same as a 5 year 11 month debt) the punishment is out of proportion to the ‘crime’.

• The choice is a personal one: to use or not to use. Our peers (governments, Lords etc) have been making laws to abide by, and ethics to follow that they at times do not abide by themselves – do you think our peers would use credit repair?

  How to Check Your Credit File
  

• Firstly, if you have never checked your credit files do it now!

• There are two companies [in the UK] that supply 99% of all credit reference requests.

  Experian Consumer Help Service PO Box 8000 Nottingham N61 5GX

  Equifax (Dept 16) PO Box 3001 Glasgow G81 2DT

  Write to both companies with all of your addresses in the past 6 years (provide postcodes, go to www.royalmail.co.uk if you need them).

  If there are two of you, married or not, you will need two separate applications.

  Send each application with a £2.00 cheque, payable to the name of that company.

  The information will be sent to you in about 14 days. A useful booklet that explains what to look for and what to do if you see any problems will accompany the information you receive.

• Some credit repair companies charge an outrageous amount of money to get to this stage. Whether you use a credit repair, or not, you should get your own file from the credit reference companies and scrutinise the information.

• The two things you are looking for are:
  1. County Court Judgment
     Judgment, CCJ or however it is described
     The information will provide the date of the CCJ, case no., court name, value, defendant, and whether satisfied.

  2. Default
     Date and amount of default

     A Default is a formal demand for payment of some form of Agreement, say, a Hire Purchase Agreement that you have missed three payments of. A Default must contain a number of regulatory requirements. That it is served under the Consumer Credit Act, the demand must say who you are, delivered to where you live (or work), who the creditor is, their address, how to contact them, what is owed, what it is owed for, when you must pay the amount by and what will happen if you do not pay i.e. “if you do not pay £100 by 12/11/99 we will take legal action”, and finally that you should seek advice.

  A CCJ and a Default are both regarded as serious information by lenders etc. You cannot pay or satisfy a Default: it is just there! (Very, very unfair). An inexperienced clerk at a finance company can send a Default to you without any supervision or serious default.

Many thanks to Colin Duguid of Debt 24.com who is taking the time to provide this information as a service to homeworkers.