Company Voluntary Arrangement (CVA)
Suitable for: Insolvent companies
This is a legally binding contract between your company and creditors. The CVA is very flexible regarding the inclusion of company assets and the actions taken by your company. The CVA is based upon an agreed proposal put forward by your company. An insolvency practitioner will be able to provide clear, impartial advice to ensure the proposal is workable and likely to be accepted. Upon completion of the CVA, any outstanding debts are written off. However, if the terms of the CVA are broken, your company may be placed into liquidation.
– Write off a proportion of your company’s unsecured debts
– All interests and charges are frozen
– Directors can remain in control during the process
– If successful, your company will emerge from the CVA debt-free
– The proposal can be drafted within days, sometimes giving the company almost instant protection against recovery action by creditors.
– It might be possible to apply for a moratorium which will stop creditors from taking recovery action against the company
– If you fail to comply with the terms and conditions of the arrangement could result in your company being put into liquidation
– Some contracts may need to be retendered, depending on their terms
– 75% by the value of the creditors need to agree
– Your company’s credit rate will suffer
– CVAs can last between 3 -5 years