IVAs and County Court Judgements (CCJ)
What is a CCJ?A County Court Judgement (CCJ) can be applied for by any creditor you owe money to. This simply means you will have to repay this particular debt directly to the Court, who can ask that it is paid in full immediately, or over a period of time. This CCJ is also recorded on your credit file for 6 years from the date it is issued.
Can my CCJ debt be included in my IVA?Yes, any debt associated with a CCJ can be included in your IVA. It is a really effective way of relieving yourself of this debt over the repayment period and it can also reduce the chances of any further action being taken against you.
This means you can get back to living without worry of the extra fees involved with a CCJ, while knowing your debts are being paid off each month.
How does an IVA affect my CCJ?Once the creditors have said yes to the terms of your IVA, the CCJ is overturned. If the CCJ has been put in place before the IVA is actioned, the debt can be included in your repayments. This means you don’t have to make any payments to the Court because your debt repayments only need to be made through the IVA arrangement.
CCJs that are being processed while your IVA is being put into place can be stopped. This means only the debt amount will be included in your IVA and you won’t be issued a CCJ. Creditors who have agreed to your IVA are also unable to take legal action against you or issue another CCJ.
However, any creditors who are not included in your IVA arrangement will still be able to take action against you alongside your arrangement.
This is why we recommend including all outstanding debts that you owe in your IVA.
Can an IVA protect me from future CCJs?Yes, an IVA stops all creditors who are part of the arrangement from taking further legal action against you. They can only receive their owed money via the agreement and so they can’t issue a CCJ against you.
However, creditors not included in the IVA can take legal action taken against you, so this is something to bear in mind, if you have other debts that are not part of your arrangement.
What if I have an Attachment of Earnings in place?An Attachment of Earnings is when your creditors receive an amount of the money you owe automatically from your wages, when you are paid each month.
If you have an IVA, the Attachment of Earnings will be removed. This is because your creditors can only receive repayments from you via your IVA agreement.
Can Charging Orders be included in an IVA?An IVA cannot include a Charging Order or overturn it but it can prevent any future Charging Orders being issued against you, by your creditors.
This is because it is something creditors can put in place if you are a homeowner and means the debt you owe is secured against your home.
The amount you pay towards your Charging Order will need to be included in your living expenses budget – which you and your Insolvency Practitioner put together. This ensures it is accounted for and you can continue to pay this whilst you complete your IVA.
If you require any further advice when it comes to IVAs and CCJs get in touch with a member of our team today who can offer you free impartial advice.