The six year sting: how Boris Johnson’s County Court Judgement could hit his credit record

If you earn more than £150,000 a year and live in a rent-free house in central London most people would think that a bill for £535 would be fairly easy to pay. Certainly, you wouldn’t expect it to end in a County Court Judgement (CCJ).

The Conservative Prime Minister Boris Johnson had a CCJ marked against him last October for the sum of £535 which he now says has been overturned. Private Eye originally published the story in the current issue of the magazine although there is no detail of who was owed the money and what it was for.

The BBC reported: "The PM's lawyers lodged an application to have the judgement struck out. A court official confirmed a CCJ was no longer present in the case after applications were considered by District Judge Hammond. They said they were unable to provide further details. Official records showed an 'unsatisfied record' for the unpaid debt was registered to Mr Johnson at '10 Downing Street', with the judgement dated 26 October last year. An additional file showed the claim, for 'defamation' and 'committed repeated defamation', was made by an Yvonne Hobbs against 'The Rt Hon Boris Johnson'."

Having a CCJ is bad news for anyone seeking to apply for loans or for a mortgage as it remains on your credit record for six years. In Scotland the law is slightly different with a system called enforcing a debt of diligence, but it is still a blot on the debtor’s credit record.

Much has been written already about the Prime Minister’s CCJ with vague references to his problem of paying for the makeover of the flat in Downing Street. The CCJ may or may not have been a factor in his efforts to pay for his children in three families, staff and Downing Street’s Council Tax and utility bills.

Normally to overturn a CCJ the you must come up with evidence to show it either has been paid, was wrongly issued or there is good reason to dispute the judgement – and usually if the CCJ is not disputed within 14 days the judgement remains and is much harder to be reversed. So eyebrows will no doubt have been raised over the MP's ability to have it scratched.

More than one million CCJs are issued against individuals every year with the average amount being around £1,500 while against businesses the figures are around 100,000 a year with the average cost of the average claim being just under £3,000.

Ian Carrotte of ICSM said one of the commonest reasons for a debtor suffering a CCJ is neglect. He said: “When a business is in trouble financially the owners often stick their head in the sand. Invoices pile up and they make the mistake of not talking to creditors. If they immediately speak to the creditors and explain they cannot pay the full amount but offer to pay something then a crisis can be averted. In larger cases with many thousands or millions at stake then a customer voluntary arrangement of CVA should be agreed. This is a legal agreement which staves off collapse and gives the debtor more time to pay and trade their way out of trouble.”

Media speculation over the PM’s CCJ tends to support the second reason a business or individual gets into trouble and that revolves around chaotic finances. Many self-employed workers employ a book keeper and use an accountant if they do not have the time or skills to sort out their finances. Others choose not to employ professional help and will essentially get in a pickle – and end up receiving a CCJ as a result which remains on the record for six years.

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk