CCJ Debts and an IVA

CCJ Debts and an IVA

A CCJ can be included in an IVA. The Arrangement can also prevent further legal action being taken against you.

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What is a County Court Judgment (CCJ)?

If you fall into arrears with one of your debts the creditor has different enforcement options open to them. One of these is to apply for a CCJ or County Court Judgment against you.

If the Judgment is issued it means that the Court requires you to repay the debt owed. You could be ordered to pay immediately in full or over time.

The implications for you of getting a CCJ will depending on your circumstances. If you are a home owner there is a risk that a Charge could then be issued against your property. You could also get an attachment of earnings.

Can a CCJ be included in an IVA?

If a CCJ has already been issued the associated debt can still be included in an IVA. This is because the Arrangement is legally binding. Once agreed by the creditors it then supersedes and overturns the Judgment.

You then no longer have to adhere to the payment terms prescribed. The debt is repaid within the IVA in the same way as all the other debts which have been included.

If you have been paying towards the CCJ you can cancel this payment once your Arrangement is in place.

CCJ payments should not be included in your IVA living expenses budget. You will no longer have to make these payments when the Arrangement is agreed.

What if an Attachment of Earnings or Charging Order has already been issued?

If you got a CCJ which you did not pay the creditor may then have applied for an Attachment of Earnings against you. If this was granted it means money is now being taken directly from your wages to pay the debt.

As with a CCJ an IVA overturns an earnings attachment. As such any debt with such an attachment can be included. Once the Arrangement is in place the deduction from your wages stops and the debt is treated the same as all the others in the agreement.

However if you are a homeowner and a Charging Order has already been placed against your property it is impossible to overturn this with an IVA. A Charging Order secures the debt. As such it can no longer be included in the Arrangement.

A Charging Order cannot be included in an IVA. It is therefore important to include an amount in your living expenses budget which allows you to make ongoing payments towards the Charge.

Will an IVA protect against future CCJs

Once an IVA is in place it prevents your creditors from taking any further legal action against you. This means they are no longer allowed to apply for a CCJ. In addition any current applications must be withdrawn.

The Arrangement can be set up relatively quickly. However even if one of your creditors manages to get a CCJ against you during the implementation period it will be overturned.

Given this starting an IVA is a good way to protect yourself if one of your creditors is threatening legal action. It can be particularly useful if you are a home owner and you believe the creditor they may also apply for a Charging Order against your home.

If a creditor has already applied for a Charging Order then it may be too late to stop this debt becoming secured even if you apply for an IVA.