Company Voluntary Arrangement

What is a Company Voluntary Arrangement?

A Company Voluntary Arrangement is a formal agreement that restructures your company’s debt, whilst enabling you to continue trading. Unsecured debts can be included, such as those owed to suppliers, trade creditors, and utility companies.

A CVA may be an option if your company is experiencing temporary financial problems, is expected to recover in time, and can support the monthly payments. If approved, the arrangement becomes legally binding for all parties as long as your company maintains the new repayment schedule for the duration.

How do Company Voluntary Arrangements work?

Company Voluntary Arrangements typically last for 3-5 years. The arrangement details the amount of debt that will be written off at the end, and once it’s in place, all interest and charges are frozen.

A licensed insolvency practitioner (IP) is appointed to analyse the company’s financial position and put forward a proposal to creditors. They then vote on the CVA, and 75% (by value of debt) need to be in favour before it’s approved.

We can assess whether your company is eligible for a CVA, and formally negotiate with creditors to reduce the monthly payments on your debt. If a Company Voluntary Arrangement isn’t appropriate we’ll provide reliable advice on the best way forward.

So what are the main eligibility criteria for a CVA?

Disadvantages of a CVA

• It’s a long-term arrangement, potentially lasting up to five years
• Your company faces liquidation if you’re unable to meet the new repayment schedule for the full term
• The arrangement appears on the company’s credit rating for six years
• Secured creditors aren’t legally bound to the agreement

Professional help from licensed insolvency practitioners

Our team has extensive experience of helping limited companies industry-wide to deal with debt, and regain their position in the market. We’ll offer reliable independent advice on your situation, and negotiate with creditors on your behalf.

If a CVA isn’t appropriate we can also provide trustworthy guidance on any alternative options. Scotland Debt Solutions operates from a network of offices around Scotland, and can offer you a free same-day consultation with one of our partner-led team.