What is a CVA (Company Voluntary Arrangement)?
In simple terms it is a legally binding contract between a company, its creditors and an Insolvency Practitioner at Lucas Johnson providing time and space to for a period of up to 5 years to repay some or all of the debts.
All unsecured creditors (tax, employee claims, utilities, unsecured loans, rates, trade) are included. It may even be possible to include your secured creditors if they agree, but this means they may have to give up their security, which is unlikely to happen but it may be possible to alter your repayment arrangements with your secured creditors to provide support to your business.
The company pays a monthly contribution out of future profits whilst the Company Voluntary Arrangement is in force. The amount paid back can be as much as 100%, but it could be as low as 5%, how much is calculated by reference to what it can afford.
A CVA is also an incredibly powerful tool, enabling you to exit unprofitable contracts, bring damages claims for early termination of agreements, renegotiate with landlords, grow sales and profits, whilst remaining in complete control and avoiding personal guarantees getting called in. It lets you rebuild your company.