A Company Voluntary Arrangement (CVA) is used in cases where the company is currently in trouble, but appears to be viable and could well become profitable again.

In layman’s terms, all the company debt is moved into one manageable monthly payment, so that the company can continue trading without the burden of winding-up petitions or liquidations being threatened. This allows you to move forward without the pressure.

They can be used in cases where the company is currently in trouble, but appears to be viable and could well become profitable again. In layman’s terms, all the company debt is moved into one manageable monthly payment, so that the company can continue trading without the burden of winding-up petitions or liquidations being threatened. This allows you to move forward without the pressure.

How does a CVA affect creditors?

The CVA binds all of the unsecured creditors of a company together once it is approved. This means that a CVA collects together:

  • Creditors who did not vote in favour 
  • Creditors who did not vote despite receiving notice 
  • Creditors who would have been entitled but did not get notice 

These terms will usually be drafted in to prevent the creditor from taking over any debt that falls within the remit of the CVA.

What are the benefits of a CVA?

▪️ The CVA is not public information: advertisement in the London Gazette is not required

▪️ Once your Company Voluntary Arrangement is in place your creditors can no longer add further interest or charges to any of your accounts covered by the agreement

▪️ Can stop a winding up petition from becoming successful

▪️ Cash flow is inevitably improved with reduced payments

▪️ The value of assets will be maximised to provide a substantial return to creditors and, while not all amounts will be able to be returned to creditors, the majority of the debt should be dealt with.

Please click on the following link for more information on Company Voluntary Arrangements.

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What is a Company Voluntary Arrangement (CVA)? 6337e91e09840

What is a Company Voluntary Arrangement (CVA)? 6337e91e09886