Thousands Hit with CCJS

Monday, 08 December, 2008

YOUNG professionals financing Christmas and lavish lifestyles on credit cards and loans are facing a backlash from lenders as thousands are dragged before the courts.

More than 120 people a day have been hit with a County Court Judgment in Greater Manchester over the past three months for failing to repay debts - a rise of 34 per cent.

Analysts say there are 'significant' numbers of people under 30 falling into financial troubles as the credit crunch bites a generation which has never known economic recession.

District judges issued 10,944 County Court Judgments in Greater Manchester between July and September compared with just 7,185 in the preceding three months.

Insolvency practitioner Ronan Duffy said: "Creditors are frantically racing each other to get a CCJ. People feel the pressure and are tempted to priorities unsecured loans, because those creditors are the ones whose tactics can verge on harassment."

It is increasingly common for debtors to be faced with multiple CCJs. In Salford, one debtor had EIGHT such judgments.

The young age of debtors and the level of debt in Manchester are striking, Mr. Duffy said. He said: "In Manchester, under-30s have a significant level of debt. There is also a high level of debt here generally - maybe because it's a relatively affluent area."

An increase in daily household costs is to blame for the rise in low-level debts, which typically reach £2,000 to £3,000 before a CCJ is issued.

Mr. Duffy said: "Fuel and food cost more and people don't have enough to make it to the end of the month so they put it on their credit card.

"I've had people come to me who are suicidal. They have buried their head in the sand. They've been alright in the past so they ignore the problems.

"But the situation's different now - it's a perfect storm of falling house prices and a mortgage market that's dried up. Even if you do have equity in your house, the chances are you can't access it."

The total amount owed in the judgments over the last quarter is just short of £34 million with the court actions taken for debts averaging at just over £3,000.

Officials figures compiled by the Registry Trust also show that there has been a fall in the number of cases which are settled in court - meaning fewer debtors are able to pay off what they owe to avoid a judgment against them.

Those who receive a CCJ will be given a bad credit rating and find it almost impossible to secure mortgages,
loans, credit cards or even bank accounts in the immediate future.

Debt solution firm IVA Manchester has seen CCJs soar in the region as creditors - who are also suffering under the crunch - crack down on debts.

Banks, building societies and credit companies can check an individual's credit rating by consulting the register of CCJs. They remain on the list for six years.

Source: http://www.manchestereveningnews.co.uk/