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Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement is a legally binding agreement between a company and its creditors that is designed to allow you to carry on trading as normal. This is one of the most common solutions to resolving business debt issues. If approved, you would get time to pay the creditors over a maximum of 5 years and normally without interest added.
A key benefit is that it is legally binding so creditors can’t change their mind mid-term due to the legal protection it provides. The Company Voluntary Arrangement (CVA) should provide directors with the necessary time in order for the company to get ‘back on its feet’. As long as the Directors can prove the Company Voluntary Arrangement is better for the creditors than a Company Liquidation (i.e. the business is viable but simply needs a little time to sort things out) then creditors will sometimes settle for as much as 70% less. Once a Company Voluntary Arrangement is approved, payments are set out over a maximum of 60 months and any outstanding debt is written off. You remain in full control of your company and you are not at risk of accusations of Wrongful Trading as you have avoided closure.
A Company Voluntary Arrangement in the right circumstances can provide an ideal solution so if your company is viable but needs to control its debts then a Company Voluntary Arrangement (CVA) may well be for you.
Most of our clients admit to suffering sleepless nights over their business concerns, if you are feeling stressed at the moment and you are seeking company debt help or advice on a Company Voluntary Arrangement then please take the time to contact us by clicking here or give us a call on 08000 842 844.
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