A Company Voluntary Arrangement (or CVA as they are commonly known) is a legal contract between your Company and its creditors where the Company pays a monthly payment based on what its cash flow forecasts say it can afford. What the Company is effectively saying to its creditors is that it cannot afford to pay them in full but wants to pay all it can afford. A Company Voluntary Arrangement can be particularly effective where a Company has suffered temporary cash flow difficulties or other trading problems that have since been overcome but have left the Company with unmanageable arrears.

Company Voluntary Arrangements have the following benefits:

• Allow the Company to continue to trade with the support of its suppliers;
• Retain existing contracts which might end in Liquidation;
• Payments are based only on what your Company can afford;
• Write off a significant percentage of the Company's debt;
• Over 90% of our Company Voluntary Arrangements are approved by creditors.

Whilst creditors may be disappointed that they are not able to be paid in full, many view a Company Voluntary Arrangement as a preferable alternative to Liquidation as they can see that you are doing all you can to repay the debt to them. As a result, many creditors will continue to support your Company throughout the Voluntary Arrangement thus enabling you to continue to trade.

As the Company Voluntary Arrangement payments are based on what the Company can afford according to its cashflow forecasts rather than the debt owed, Company Voluntary Arrangements can result in the Company paying less than 50% of the total debt back with the rest written off after 5 years. This is still a far better result for creditors than Liquidation where typically creditors get nothing and also allows you to save your Limited Company.

As a Company Voluntary Arrangement allows the Limited Company to continue in its existing legal form, Company Voluntary Arrangements also have the benefit of allowing ongoing contracts to continue. This is an important difference from Liquidation where contracts typically terminate and is particularly useful where contracts are over long periods of time and are hard to transfer.

If you want to know more about entering into a Company Voluntary Arrangement, we can provide you with free help on what to do next and can advise whether a Company Voluntary Arrangement is likely to work for your business.

As a Company Voluntary Arrangement needs the support of your creditors it is important that you start the process as soon as possible so call us free on 0800 066 3122