Company Voluntary Arrangement (CVA)

If a company has a viable future but is being hampered by historic debt then a CVA may be a sound solution. A CVA is a deal between the company and its unsecured creditors to repay them from future profits or a deal may be written to sell assets and pay back creditors from the proceeds.

The typical CVA proposal is based on preserving the company, so that something is paid to creditors over a period of time. Directors remain in control of the company, personal guarantees usually don’t get called in and it gives the business a fighting chance to survive.


  • Historic debts are frozen and no further interest or costs will accrue.
  • Cash flow pressure will ease.
  • Repayment structure of the CVA is flexible, payment is based on profits.
  • Creditors cannot take further enforcement action.
  • Avoids Liquidation or Administration.
  • Existing finance can usually be left in place.
  • No report on Directors conduct required.


  • The proposal is not fixed, there is a greater amount of interaction between the Company and its creditors i.e. the Company makes an offer and the creditors come back with a counter bid.
  • The Company cannot increase its debt whilst the proposal is being made – which can be difficult for a business.
  • The business must have a viable future.
  • A lot of determination and hard work is necessary.


Unlike an Individual Voluntary Arrangement, a CVA does not have a pre-determined term of 5 years, indeed every CVA is different and a sensible time frame should be set.

Failure to Make Contributions

Generally, some flexibility is built into the structure on timing of payments within the terms of a CVA, however, if the company cannot keep up with payments and a further proposal is not agreed by the Creditors to vary the terms of the CVA then the company will have no alternative but to pass into Liquidation and usually this is done by a Creditor driven Winding up Order.

Call 0330 400 0481 for a free, no-obligation discussion to decide whether a CVA is an appropriate solution to your debt problem.
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