Agreement in Principle with CCJ: What It Means for You

If you’re facing a County Court Judgment (CCJ), you may have heard the term “agreement in principle” (AIP) thrown around. But what exactly is an AIP and how can it help you?

In simple terms, an AIP is an agreement between you and your creditor to pay off your CCJ in installments. It’s essentially a repayment plan that both parties agree to, without the need for a court hearing.

Here’s how it works: Once you receive a CCJ, you have 30 days to pay the full amount owed. If you don’t pay within this timeframe, the CCJ will be registered on your credit file for six years, which can impact your ability to get credit in the future.

However, if you approach your creditor with an AIP, they may be willing to work with you to come up with a more manageable repayment plan. This could involve spreading out your payments over a longer period of time, or even reducing the amount you owe.

It’s important to note that an AIP is not legally binding, and your creditor could still choose to take further action against you if you don’t keep up with the agreed repayments. That’s why it is crucial to ensure that any AIP is affordable and sustainable for you.

So, how does an AIP impact your credit file? If you reach an AIP with your creditor before the CCJ is registered, it won’t be added to your credit file at all. This can be a great outcome, as a CCJ can have a significant impact on your credit score.

If you reach an AIP after the CCJ has been registered, it will still be visible on your credit report. However, the fact that you’ve made an effort to repay the debt can be seen positively by lenders, who may be more willing to offer you credit in the future.

It’s important to note that an AIP is not the only option available to you if you have a CCJ. You can also apply to have the judgment set aside (cancelled), or make a request for a payment plan through the court system.

In summary, an agreement in principle with CCJ can be a useful tool for managing your debt and avoiding the negative impact of a CCJ on your credit file. However, it’s important to ensure that any agreement is affordable and sustainable for you, and to explore all your options before making a decision.