Can I Enter Into An IVA If I Have A CCJ?
If you find yourself grappling with debt, a structured debt solution like an Individual Voluntary Arrangement (IVA) or a County Court Judgment (CCJ) can be the initial step in regaining control over your finances by repaying your debts in a more feasible and budget-friendly manner.
Looking to apply for an IVA?
However, is it possible to enter into an IVA with an existing CCJ, and what impact would this have on your current arrangement?
In this comprehensive guide, IVA Helpline will provide all the essential information about IVAs and CCJs.
What is an IVA?
An Individual Voluntary Arrangement (IVA) is a legal contract between you and your creditors, allowing you to repay a part of your unsecured debt through a series of monthly instalments.
This may encompass benefit overpayments, credit cards and loans, debts owed to family and friends, and even National Insurance arrears.
As IVAs are official debt resolution methods, they must be managed by an Insolvency Practitioner (IP) who will supervise your arrangement from beginning to end, ensuring a seamless process.
Typically, IVAs span five years but can be extended to six years if a payment is missed or a payment break occurs during the agreement. Once the arrangement is completed, you will be released from your IVA and considered debt-free.Check if you qualify
What is a CCJ?
A County Court Judgment (CCJ) refers to a court order that may be registered against you if you have outstanding debts and your creditor doubts they will receive the money owed without resorting to legal action.
In accordance with the Consumer Credit Act, you must receive adequate notice of a potential CCJ before any action is taken.
Typically, this comes in the form of a letter detailing the steps you can follow to address the issue and clarifying the consequences of inaction.
Upon receiving a CCJ warning letter, you have a 14-day window to respond, indicating whether you plan to pay the specified amount or contest the order. Failing to respond within this period may result in the court imposing a repayment plan that could be unmanageable or even requiring you to repay the entire debt immediately.
At IVA Helpline, we understand the main concerns surrounding CCJs, such as the problems they pose, the pain points they create, and the solutions available.
Call us on 0800 464 7235
Our trained advisors are here to help, so if you think an IVA proposal is one of the best debt solutions for you, don’t hesitate to call us on 0800 464 7235 to speak to one of our trained debt advisors or click below to see if you qualify…Check if you qualify
Will a CCJ appear on my credit file?
Similar to an Individual Voluntary Arrangement (IVA), a County Court Judgment (CCJ) remains on your credit file for six years starting from the date it was granted, regardless of whether it has been partially or fully repaid during this period.
This situation may pose challenges when attempting to secure additional credit, such as loans or mortgages. Furthermore, your CCJ will be recorded in a public register called the Register of Judgments, Orders and Fines for six years. Although this information is readily accessible to the public, it is typically only examined by financial industry professionals, such as banks and lenders, when evaluating your credit application.
If you pay the entire amount specified within one month of receiving a CCJ, it will be removed from your credit file and the Register of Judgments, Orders and Fines.
If this is not the case, it is essential that you reach out to the appropriate credit reference agencies and request an update to your record.
Can I get an IVA if I have a CCJ?
If you’ve been issued a County Court Judgment (CCJ), you might be curious about whether you can pursue an Individual Voluntary Arrangement (IVA). The good news is that, yes, you can. In most cases, a CCJ debt can be incorporated into your IVA, eliminating the need for an additional monthly payment towards the CCJ and allowing you to concentrate solely on your IVA payments.
As an IVA Helpline, we want to emphasize that obtaining an IVA while having a CCJ demonstrates that you’re treating all creditors fairly without prioritising one over another. This approach can prevent your IVA proposal from being rejected. It also indicates that you’re responsibly addressing your debts rather than waiting for creditors to take further legal action against you.
When your IVA commences, CCJ payments will temporarily cease, allowing them to be incorporated into the IVA. Subsequently, your creditors will begin receiving payments from your Insolvency Practitioner, just like the other creditors included in your IVA.Check if you qualify
How will an IVA affect my CCJ?
Upon entering an IVA, your existing CCJ will not be dismissed; however, it will be neutralised by the IVA. Additionally, it might be feasible to halt any ongoing CCJs when initiating an IVA, preventing you from acquiring a new CCJ.
Once your IVA is approved, the creditor who issued the CCJ will be barred from contacting you or pursuing further actions to reclaim the outstanding debt, as you will be making payments through the IVA.
If you have concerns about the impact of your IVA on your CCJ, we recommend reaching out to a debt adviser or your Insolvency Practitioner (IP) for personalised debt advice.
Will an IVA remove a CCJ from my credit file?
Upon initiating your IVA, it will appear on your credit report for a duration of six years, during which your credit score may be negatively impacted. Nevertheless, it is likely that your credit report already contains missed payments or defaults that resulted in your CCJ, and these debts will remain even after entering into an IVA.Check if you qualify
Can I get an IVA if I have had a CCJ in the past?
Even with a past CCJ on your record, you are not prevented from pursuing an IVA to assist with repaying your unsecured debt. Be aware, though, that if your credit file still contains the CCJ, your IVA will appear as a separate entry on your credit report, potentially causing additional harm to your credit score.