What Is a Company Voluntary Arrangement (C.V.A?) Quite simply a C.V.A is a contract between a debtor which is the company and his or her creditors regarding the repayment of unsecured debts. In normal circumstances this can lead to 40 to 60 pence in the pound being written off by creditors.
Company Voluntary Arrangement A Business Rescue Scheme:
A company voluntary arrangement is a formal and legal insolvency procedure designed specifically to ring fence a trading Companies unsecured liabilities and for those liabilities to be paid off overtime. Therefore the business buys time to implement necessary business turnaround strategies so that the Company can return to growth and profit. There is no legal requirement to repay creditors in full, so the vast majority of Company Voluntary Arrangements are accepted by creditors. The procedure is very flexible and takes the form of a nominal payment that is lodged on the scheme for the benefit of the creditors followed by agreed monthly payments that discharges a reduced debt. Unlike liquidation or administration a company voluntary arrangement is NOT advertised in the newspaper, therefore there is no stigma, though everyday life will change significantly – for the better – no longer under the pressure of unmanageable and stressful debt.
Company Voluntary Arrangement Procedure:
A company voluntary arrangement requires that a proposal is drafted which sets out the debtors circumstances, assets, liabilities and the manner in which it proposes to deal with your Creditors. We have all the documentation prepared to enable the production of your proposal. The proposal is then lodged in court after having been agreed by you. Copies of the proposal are then circulated to the Creditors and a meeting date convened. The meeting of creditors is held in order to formalize the arrangement, which often has been won prior to the meeting. A Company Voluntary Arrangement reflects favourably on the debtor by endeavouring to maximize the returns payable to the creditors. The debtor does not go into liquidation.