CVA : Is It The Right Decision ?

The CVA or Company Voluntary Arrangement is a realistic solution to a company experiencing serious cashflow problems.

There are many similarities between an Individual Voluntary Arrangement (IVA) an a CVA, but the most obvious difference is that the Individual Voluntary Arrangement (IVA) is for personal insolvency cases, whereas a CVA is designed for a limited company.

Take this link for a more detailed description of a CVA.

Once the CVA has been agreed and accepted at a Meeting of Creditors, the Directors need to be aware that care and attention needs to be afforded to the maintenance of the CVA for the full term of the agreement, which could be as long as 5 years.

The Directors need to make decisions before and during the CVA that will help to preserve the company, rebuild sales and make the company a realistic and viable profit making business.

It is important to demonstrate to the creditors that there is a real desire to not only have the company’s interests at heart, but also, to maximise the creditor's interests in repaying as much as possible.

If the company is experiencing further problems whilst in the CVA, then it is not always an insurmountable position. If the company is still considered to be viable, then it is possible to reconvene a Creditors Meeting at any time to ask the creditors for amendments to the original CVA.

It is also important to remember that, just as with an Individual Voluntary Arrangement (IVA), should there be any material changes to the running of the company, the supervisor will need to be informed.

For any further information on CVAs, call myIVA-Adviser.com for free on 0800 088 7503 anytime and ask to speak to one of our CVA advisers.

• CVA Information