What to do with a CCJ

Often a director does not know what to do with a CCJ – (County Court Judgement). An easy answer would be to pay it but if you had the money then you probably would have paid the debt before the Judgement arrived through your letterbox. If you don’t settle the debt then your letterbox may get a winding up petition next.

Disputed Debt

A disputed debt should have been challenged at the claim stage. Either the defence was rejected or not filed. Either way the debt requires settling. It is always critical that when a high debt arrives, a director should take stock of the financial situation. The true financial position should be assessed prior to paying the high debt.  Once the full picture is in view, it may be that things are worse than first thought. That being the case, the next step is to calculate the money due in from sales. Then put a cash-flow spreadsheet together to estimate future trade.

Know where you are

It will become clear, after working the full company’s debts into the spreadsheet, how serious the situation is. This information is very useful when considering all options that may be discussed with an advisor. It is often tempting for Directors just to pay debts to the detriment of efficient cash-flow. Instead, take advice …once, twice, three times until you understand your situation. Only when you really understand your situation will you understand the solution.

Choices

Sometimes the solution is the introduction of new investment into the company or a rapid reduction of excessive overhead costs. Other times it is the use of a company voluntary arrangement that can save the business. Unfortunately, too many companies fall into liquidation through delay or lack of knowledge.

If you are a director wondering what to do with a County Court Judgement then talk to Directors Circle on 0333 050 8518 to discuss your options.