Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement (CVA) is a legally binding arrangement between a company and its creditors to repay them over a fixed period of time (usually 5 years).

The main aspects of a CVA are -:

• Enables the company to continue to trade with a view to increasing the return to the creditors over the period of the CVA.
• Immediately stops all creditor action and winding up procedures.
• if you own a vehicle it must be worth £1,000 or less unless it has been specially adapted because you have a physical disability
• Reduces debt repayments to something more affordable to the company.
• The company officers can continue to manage the business affairs.

Creditors Voluntary Liquidation (CVL)

If a company is insolvent and cannot pay all of its debts, sometimes the only appropriate course of action is to enter into a company liquidation. A Creditors Voluntary Liquidation (CVL) is the most common way for directors to deal with these problems.

A Creditors Voluntary Liquidation (CVL) can be used when:

• The company is insolvent.
• The company is not capable of a viable financial restructure.
• The directors don't feel they have the determination needed to rescue the company.

Administration Orders

Administration orders were initially introduced by the Insolvency Act 1986 as an insolvency device to protect a company from its creditors while the management team and appointed insolvency practitioners determine the best restructuring plan and put it into operation. The Enterprise Act 2002 has made access to the legislation easier for companies in significant debt. An Administration Order can be sought by the company, its Directors or one of the creditors.

One of the key benefits of an Administration Order is that a company in administration may continue to trade while a plan is formulated to achieve either a rescue as a going concern, or to obtain a better result for creditors than would be likely if the company were simply wound up.

As part of Spencer Hayes – one of the UK‘s leading financial services companies – Debt Relief.org.uk can advise on on the full procedure for applying for business debt relief. To find out more call us today on 0800 043 73 60 or complete our enquiry form and of sympathetic company debt relief advisors will call you free and without obligation.