Can you go bankrupt on a judgment?
If you have CCJs (County Court Judgments) and are struggling to make the minimum repayments on your debts then you may be considering bankruptcy. But can you file for bankruptcy while a judgment is already in place?
Can you apply for bankruptcy with a CCJ?
Yes, CCJs can be considered as part of your bankruptcy. In fact, if you have run out of options, it may be the most effective way of dealing with this sort of debt.
Your bankruptcy will clear the CCJ and you will no longer need to deal with making payments directly to the creditor or face the threat of further legal action – if you are unable to make your CCJ repayments. This means your creditor cannot issue bailiff action against you, for example. It’s also very important you stop all payments to the creditor once your bankruptcy is agreed.
What other debts can be included in bankruptcy?
There are a wide number of debts that can be included within the terms of your bankruptcy. This table breaks down what can and can’t be included.
Type of debt
Can it be included as part of the bankruptcy process?
Child maintenance arrears
No, if your arrangement was set up by the Child Maintenance Service or CSA
Yes, if they are not fraudulent
TV licence arrears
Hire purchase agreements
Yes, but you may need to hand back the vehicle to the finance company
As you can see, a variety of debts can be included but be aware of the ones that require paying off via other means.
Can bankruptcy remove a CCJ from your credit report?
No, a CCJ will still be listed on your credit report for six years from the date it was granted. This is something to be aware of if you want to apply for credit in the future. However, the impact of bankruptcy is much greater than a CCJ, so either way you may struggle to get accepted for credit once it is complete.
You should check back to ensure the CCJ is marked as complete once your bankruptcy is over and that it is removed after six years. You can contact the three credit reference agencies – Experian, Equifax and TransUnion UK – directly to have this amended.
Can bankruptcy protect you from legal action from creditors?
Yes, creditors will no longer be able to take legal action against you, which can give you peace of mind. Plus, the creditors who have already been granted a CCJ against you can no longer take any further legal action.
What if you have a Charging Order?
The only time bankruptcy cannot protect you from legal action is if a creditor has already had a charging order issued against you. This means the debt you owe is already secured against your property and you will need to continue paying this in instalments to clear what you owe.
If you are considering bankruptcy and already have a CCJ, speak to a member of our team who can help you decide if it is the best decision and how it will impact you. Call them on 0800 316 1833or submit an enquiry via our contact form for a callback.