CCJ Debt and an IVA

17/03/2023
CCJ Debt and an IVA

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

Included in this article:

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Can a CCJ be included in an IVA?

If a CCJ has already been issued against you, this debt can be included in an IVA.

Once your IVA is agreed by the creditors, it is legally binding on all of them. This means it overturns any CCJ already issued by any of them.

You no longer have to pay the Judgment because the debt is repaid within the IVA. It is treated in the same way as all the other debts which have been included.

Any payment you are already making towards a CCJ can be cancelled once the Arrangement is in place.

As with other debt repayments, these are not included in your IVA living expenses budget. You will no longer have to make these payments when the Arrangement is agreed.

Struggling to get your head round all of this? We can help. Call us (0800 011 4712) or complete the form at the bottom of this page. The advice is free and confidential.

What happens if you already have an Attachment of Earnings?

Any creditor who has a CCJ against you may also have applied for an Attachment of Earnings. If so, money is now being taken directly from your wages to pay the debt.

Once your IVA is in place, this attachment of earnings will also be cancelled.

The deduction from your wages stops and the debt is treated the same as all the others in the agreement.

Normally it will take about 3 months from the start date of your IVA for any wage attachment to be cancelled.

If you are a homeowner and a Charging Order has been placed against your property, the debt is now secured. This means it can’t be included in an IVA.

Are you protected from getting a CCJ in the future?

Once an IVA is in place, the creditors who are included in the Arrangement can’t take any further legal action to collect their debt. As such, they can no longer apply for a CCJ against you.

If any of the creditors are in the middle of applying for a Judgment, the application must be withdrawn.

This is the case even if the creditor in question did not agree to the IVA. Once it is in place, any creditors who rejected are still legally bound.

However, it is important to remember that an IVA only protects you from the creditors who are included.

If you forget to add a debt, or incur a brand new debt during the Arrangement, this creditor can still take enforcement action against you and get a CCJ.

Got a CCJ and want more advice about starting an IVA? Give us a call (0800 011 4712) or complete the form at the bottom of this page. Its free and confidential.

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12 thoughts on “CCJ Debt and an IVA”

    Kath says:
    28/11/2018 at 16:30

    Hi,

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

    Reply
      James Falla says:
      28/11/2018 at 16:45

      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.

      Reply
    Kath says:
    28/11/2018 at 18:00

    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

    Reply
      James Falla says:
      28/11/2018 at 18:01

      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.

      Reply
    Janet says:
    13/03/2020 at 13:29

    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.

    Reply
      James Falla says:
      18/03/2020 at 11:42

      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?

      Reply
    Marcus says:
    21/05/2020 at 12:24

    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?

    Reply
      James Falla says:
      21/05/2020 at 12:39

      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.

      Reply
    blahwal says:
    13/04/2021 at 11:42

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

    Reply
      James Falla says:
      13/04/2021 at 11:55

      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.

      Reply

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