It's used mainly by struggling businesses looking to repay the Company’s creditors over a period of time (usually up to 5 years) whilst continuing to trade with the prospect of once again regaining profitability. The procedure is legally binding which provides protection against legal actions commenced by creditors, allowing the Company to freeze all its unsecured debts and offer a revised repayment plan under new terms.
Providing the Company has debts of £15,000 or more an offer to repay the debt over a period of time by way of one monthly affordable payment is offered to its creditors. With an achievable repayment structure set out, the arrangement is overseen by a Licensed Insolvency Practitioner who acts as Supervisor and sets out the parameters of the CVA in a proposal and monies collected are distributed to creditors of the CVA on a pro rata basis.
Depending on the circumstances of each Company the proposal of a CVA can be to repay creditors in full or a repayment of a percentage of the debt. Provided you keep up with the one monthly affordable payment, the Company is usually debt free in 60 months or less. Upon the CVA being successfully completed, all other outstanding debt is written off.
There are many benefits of a CVA
You will be asked to complete some very simple contact details so that we can call you back within ten minutes.
The following steps provide a brief explanation to the CVA process