Can an IVA include a CCJ?
Yes, a County Court Judgement debt can be included in an IVA.
Insolvency law states that when someone applies for an IVA, all their unsecured creditors must be treated equally, with no advantage being afforded to one over another.
This is even the case when a County Court Judgement, or CCJ, has been awarded.
Existing CCJs
The IVA, in effect, overwrites the CCJ rendering it unenforceable.
If a payment arrangement is in place, it will be terminated in favour of the IVA, as no preference can be shown.
Your Insolvency Practitioner (IP) will guide you but, suffice to say, the judgement debt will be included within the IVA and that creditor will receive payments in line with all your other creditors.
What is a CCJ?
Under the Consumer Credit Act of 1974, if a creditor wants to take legal action against you relating to the non-payment of an unsecured debt, they must first obtain a court judgement against you.
This means they must prove to the Court that you owe them the money and have failed to repay it as agreed.
Creditors can't take legal action against you to recover the debt until they have done this.
Once a CCJ has been received, you have 30 days to settle the debt.
If the debt is settled within this time frame, it's considered settled and, as such, the CCJ will not appear on your credit file.
If, however, the debt hasn't been paid in full after 30 days, the CCJ will be recorded on your credit file and will have a significant impact on your credit rating.
Just as with any negative marker, a CCJ will remain on their credit file for 6 years.
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