The process of Company Voluntary Arrangement (CVA) was introduced in the UK law in 1986. The CVA is a legal procedure which allows a limited company to settle its debts over a fixed period of time.
An agreement is made up front with the company’s creditors to make repayments towards the debts over a period normally no longer than 3-5 years. Once the agreed number of repayments have been made, the creditors agree to write off any debt that remains unpaid.
Creditors will be inclined to agree to a company voluntary arrangement because it is an offer to be paid something rather than nothing. Once the CVA is in place, creditors are no longer able to take legal action against the company.
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The aim of a company voluntary arrangement is to get a better return for creditors than would be possible if the company were put into administration or liquidated. From the company’s side, the CVA enables the business to continue to trade and keep its work force in employment.
The best way to understand which solution is right for your company is to speak to an expert.
The Beat My Debt forum is great place to start, giving online access to industry experts.
Alternatively you can call Beat My Debt free on 0800 077 6180 and speak directly to one of our expert advisors who will give free, independent and confidential advice.
