The Directors of an insolvent company can put forward a proposal for a Company Voluntary Arrangement. (CVA).
A CVA allows a company with debt problems or that is insolvent to make a binding arrangement with its creditors to repay all or some of its corporate debts over an agreed period of time.
- REDUCE your debt – a substantial proportion of the debt can be written off
- REDUCE the repayment period – debt free in a maximum of 60 months
- REDUCE your payments – repay your debt by affordable monthly instalments.
- STOP creditor pressure – an end to phone calls, letters and legal action.
- STOP interest & charges – the debt will not increase.
We can assist in the preparation of such a proposal. A meeting of creditors will be convened to consider the proposal and as long as 75% (by debt value) of the creditors who vote at the meeting agree this, the CVA is accepted. All creditors will be bound by this decision, whether or not they vote and any winding up action in process by the courts will be halted.
Monthly contributions are normally paid to the Supervising Insolvency Practitioner who is allowed to deduct his fees before paying the rest of the proceeds to creditors.
Directors who continue to trade whilst their company is insolvent can face disqualification under the Company Director Disqualification Act.