If you have a CCJ you can use an IVA to overturn it. The Arrangement will also protect you against court action which could be taken by your other creditors.
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- Can an existing CCJ be included in an IVA?
- Will you be protected against future CCJs?
- What happens to an Attachment of Earnings?
- Is a Charging Order overturned?
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Can an existing CCJ be included in an IVA?
If one or more of your creditors has issued a CCJ (County Court Judgment) against you this debt can still be included in an IVA. Once the Arrangement is accepted you stop making payments towards it.
CCJs can be included because an IVA is a legally binding solution. If the majority of creditors agree then all are legally bound to accept the terms. This includes setting aside any previous actions they have taken against you.
After your IVA is in place all included creditors must stop receiving payments directly from you. This includes any which have CCJs. They can only be paid through the Arrangement.
Will an IVA protect you against getting another CCJ?
Once an IVA is in place your creditors are no longer allowed to take legal action against you to collect their debts. As such they cannot start a new application for a CCJ.
In addition if any are in the process of applying for a Judgment this must be stopped and withdrawn. You are protected from any further action from your creditors.
You are not protected from creditors who are not included in the Arrangement such as secured debts. If you fail to keep up with theses payments legal action can still be taken against you to repossess the assets.
If you take addition debt during your IVA such as a payday loan and do not keep up the payments this creditor can take action against you. This could include applying for a CCJ.
What happens to an Attachment of Earnings?
If you do not pay a CCJ the creditor can then apply for an Attachment of Earnings against you. If granted money is then taken directly from your wages to pay the debt. An IVA will overturn this.
Once the Arrangement starts none of the included creditors are allowed to receive payments from you via any other source. As such if any are getting money direct from your wages these payments must stop.
Any wage deductions due to an Attachment of Earnings stop after an IVA is accepted. As such the deduction should be ignored when calculating your income and how much your IVA payments will be.
Is a Charging Order overturned by an IVA?
If you are a home owner and a CCJ has been issued against you the associated creditor then has the right to apply for a Charging Order. If this is granted the debt becomes secured against your home.
An IVA prevents creditors from applying for a Charging Order. Once in place non of those included can start such an application. However the Arrangement must be in place before the application is started.
Once a Charge is issued it cannot be overturned by an IVA. Given this if a CCJ is already issued home owners should consider applying for an IVA as soon as possible.
If an application has already been made for a Charging Order and an Interim Charge has been awarded it is unlikely that an IVA will help. The Court will normally still issue the Charge even if an application for an IVA is made in the mean time.
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