What are CCJs and IVAs?

CCJs
If an unpaid creditor decides to take action against you this can result in a County Court Judgement (CCJ). If you pay the debt, you avoid a court hearing. If you don’t, this will result in a private hearing court ‘judgement’ against you. This order is called a CCJ and will either be for the amount agreed between you and your creditor or, if you can’t agree, a payment set by the court. CCJs remain on your credit record for a period of time, even if you have settled the debt.
IVAs
Individual Voluntary Arrangements were established in the mid-eighties as a way for people or businesses in financial trouble to cut their debts but avoid bankruptcy.
IVAs are a legal contract between lenders and a borrower to pay back 30-50 per cent of their debts through an agreed monthly repayment over five years. Interest is frozen over the repayment period and as long as the debtor keeps up payments he or she is debt-free when the term is up. However, IVA holders have zero credit status and cannot apply for any credit during the term of the IVA.
To set up an IVA, 75 per cent of the creditors have to agree to the proposal put forward by the individual's IVA practitioner. The IVA company will look at a person's income and outgoings and calculate how much they can afford to pay each month. According to accountant PricewaterhouseCoopers, an IVA application is made every seven minutes.