What is it?
A Company Voluntary Arrangement (“CVA”) is an insolvency procedure that allows a financially troubled company to reach an agreement with its creditors about payment of all, or part of, its debts over an agreed period of time. It is a route frequently taken by directors who feel their company has a viable future and are prepared to work hard to keep it alive.
What will happen?
Under a CVA, a company makes a court-approved agreement with its creditors that in most cases allows it to continue trading while also agreeing terms with the creditors to settle its debts.
A CVA usually lasts between three to five years. It can specify whether the creditors will get paid in full over that time or whether they will receive part payment, with the rest of the debts written off.
CVAs are particularly useful when a company that is basically profitable suffers an issue such as a large debt. Certain companies can obtain a moratorium to prevent creditors taking enforcement action, although if creditor protection is needed it is more usual to place the company into administration first, with a view to exiting into a CVA as quickly as possible thereafter.
How White Maund can help
If your company is experiencing financial difficulties and a CVA is appropriate, we can negotiate with your creditors, to explain the situation to them and assure them that the arrangement is the best way forward for everyone. We will help you to keep control of your company and continue to trade as normal. We’ll be happy to discuss your personal circumstances and help you decide what is best for your company, so call for a free consultation.
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