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.

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10 thoughts on “CCJ Debts and an IVA

    Kath says:


    Can an employer continue to deduct money from wages when employee has started an IVA?

      Hi Kath

      Once an IVA is agreed by the creditors it becomes legally binding on all of them. From that date any attachment of earnings or wage arrestment that any of the creditors has previously been granted (meaning money is being taken from your wages) must cease. If the money were to continue to be deducted it would mean that the creditor in question would be receiving preferential payment which is not allowed.

      That said that it can take some time for a message to be sent to the employer informing them that the attachment of earnings must stop. It is quite common for the deduction to continue for a month or two after an IVA is agreed. If you have started an IVA and you find this is happening you should inform your IVA company about it.

      You can also contact the court that made the order and the Centralised Attachment of Earning Payments (CAPS) office to inform them that you are now protected by an IVA. They may not be aware that your IVA has started. CAPS will then normally write to your employer and confirm the deduction must no longer be applied.

    Kath says:

    Thankyou for your swift reply James.

    There has been no attachment of earnings put in place he has took it upon himself to take this money, nothing has been signed to say he can take it nor have we been informed that any monies were going to be taken

      I assume he is one of your creditors Kath?

      If this is the case then as long as he was legitimately included in the list of your IVA creditors (and as such issued with a copy of the proposal and informed of the creditors meeting) then legally he is not allowed to do this.

      The problem is enforcing the rule. You need to discuss the situation with your IVA company and see what they suggest. Ultimately the only way to force him to stop may be with a court order.

      Note: If your employer was not listed as one of your creditors and you owe him money then you are not protected by the IVA. He is still within his rights to enforce the debt. However (and I am not a solicitor) I doubt whether he has the legal right to deduct money from your wages without a court order.

    Janet says:

    my tenant had an IVA in December but has not had rent owing for the last 3 months included in it. Can I still get an attachment on earnings? She failed to include this debt in the IVA.

      Hi Janet

      If a debt is not included in the IVA then it is not legally protected by the IVA. As such you would be free to continue collections action against the tenant and apply for an attachment of earnings if you decide to do this.

      Normally a provision to repay rent arrears by increasing the ongoing rent payment would have been allowed in the tenant’s budget when the IVA was set up. I assume you do not believe this was the case for your tenant?

    Marcus says:

    I have an iva, there is a ccj involved in this, I am finding it difficult to rent due to the ccj I have the money to pay it but apparently I’m not allowed to. Can I get around this?

      Hi Marcus

      The reason you are finding it difficult to rent a property is not because of your CCJ. It is because there is a record of your IVA on your credit file and this is making your credit rating poor. As a result if you go through a letting agent and they do a credit check, you are likely to fail this.

      As such even if you did pay off the CCJ (which being in an IVA you are not allowed to do) the record of the IVA will remain on your credit file for 6 years from its start date. You credit rating will thus remain poor and your ability to rent will remain unchanged.

      If you are looking to rent through a letting agent, the only options that can sometimes help are to try and offer to pay rent in advance or offer that someone with a good credit rating will act as a guarantor for you.

    blahwal says:

    What happens if you have multiple ccjs will applying for an IVA stop legal proceedings

      Hi Blahwal

      As highlighted in the article above, CCJ debts can be included in an IVA. Once it is agreed, the creditors are legally bound and must not take further action to collect their debts. From that time they are not allowed to undertake new legal action. Bailiff action must stop and no new applications for an attachment of earnings or legal charge against a property are allowed.

      That said, if an application for a charge is already underway (especially if an interim charge has already been issued), it is unlikely that starting an IVA will be able to prevent it from being issued.

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