Inequalities and over-indebtedness: the spatial patterns of County Court Judgments in England and Wales

Abstract

With rising costs of living, concerns over the stability of household finances dominate every level of decision-making, from individuals choosing which expenses to prioritise to government policy. Using County Court Judgment (CCJ) data (a record of defaults on unsecured debts acknowledged by the UK legal system) between 2016 and 2023, this paper explores the spatial distribution of households facing legal repercussions for debt arrears in England and Wales. We then provide high-resolution evidence of the shared socioeconomic characteristics of these areas. The results of this analysis demonstrate that areas facing the highest rates of CCJs are often those that are experiencing the greatest social and economic challenges. However, whilst general deprivation measures do broadly align with higher cases per capita, focusing on specific features provides a substantially more accurate picture of where the highest rates are found, with tenure type being found to have the greatest influence on expected indebtedness. We then consider an approach to relaxing the assumptions about spatial uniformity that underpin our initial model. A mixed-effects model demonstrates modest improvements, correcting for spatial concentrations of errors, whilst a regional model suggests significant sub-national variations in driver effects. Overall, the results presented use a novel data source to provide further support for a number of established theories about the drivers of indebtedness in England and Wales, whilst questioning the extent to which these theories apply equally across space.