If you’ve received a default judgment from the court, you need to decide what to do. Should you apply to set it aside? Or would you be better off paying it?
Here are a few things to think about.
Is the default judgment less than one month old?
If a judgment is paid within one month, it won’t appear on your credit record at all. From the point of view the credit reference agencies, it will be just as though it was never entered against you in the first place.
This will mean that some of the negative consequences of a CCJ can be avoided.
So, if the amount involved is very small, you may find that applying to set aside the judgment is more expensive than simply paying what is ordered, particularly as there is an application fee of £255.00.
It may leave a bitter taste in the mouth to pay a judgment when you don’t feel it should have been granted in the first place, from a purely economic point of view, it may be the best option.
Do you admit the amount claimed against you?
If you admit the amount claimed against you, it may be more difficult (although not impossible) to successfully apply to set aside judgment because one of the factors a court will consider is whether or not you have a real prospect of successfully defending the claim if it goes to a full trial. By not paying it, you may simply be delaying the inevitable.
The court will sometimes set aside a judgment even if you admit the amount claimed but you will need to persuade the judge that there’s a good reason, eg the claim form was sent to the wrong address or you were away from home when the court papers were served, so you didn’t have chance to respond.
You may need to take specialist advice on the prospects of successfully applying to set aside judgment.
How important to you is a clean credit record?
If you pay the judgment, it will still remain on your credit record for six years, although it will be marked as satisfied. This is better than having an unsatisfied judgment on your record but may still make it difficult for you to obtain credit.
If all you’re concerned about is avoiding the bailiffs coming round and you’re not concerned about your credit record, it may be quicker, cheaper and easier to pay it.
Can you reach a deal? Set aside judgment and pay it!
This may sound counter-intuitive but we’ve found that this approach can really help you.
The claimant simply wants their money. They don’t care whether or not you have a clean credit record. Why not try to reach an agreement? You pay them the money. They agree to setting aside judgment.
We’ve often found that claimants are willing to consent to the judgment being set aside on the condition that they get what they feel they’re owed.
Depending on the circumstances surrounding the claim and the amount of the judgment, you may or may not feel this is appropriate. But it’s an option you should consider.