The CVA Process
Here at The Insolvency Experts, we have helped many clients to deal with the CVA process and all necessary CVA procedure to ensure that their CVA application has the best possible chance of being accepted. By entering into a Company Voluntary Arrangement your business receives benefits including:
- Being protected from any further action from creditors (e.g. winding up petitions)
- Allowing payment terms to be spread out as per your business requirements
- Stopping immediate demands for repayments from existing creditors.
Once your CVA has been approved, you can rest assured that your existing creditors cannot commence legal action against your company for the previous debts, ending your sleepless nights as a director and putting your business on the road to recovery. For more information on a CVA application, contact us by phone or email today.
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4 Key Questions on the CVA Process
How do you know if the CVA process is right for you?
Firstly, you should understand whether a CVA is the right course of action for your company and the creditors of your business. A qualified Insolvency Practitioner will be able to advise you on whether there are other potential outcomes which may be better for your circumstances. If you believe a CVA application is the right outcome, it may well be, but we are more than happy to discuss this with you before you begin the process.
What happens when you enter into a Company Voluntary Arrangement?
Once you have discussed your circumstances, and it has been agreed with an Insolvency Practitioner that a CVA is most appropriate, you will appoint them to draft a CVA proposal for your creditors. Before issuing the CVA it must firstly be approved by the directors of the company, and any revisions made where needed.
The directors should agree that the payment terms suggested in the CVA procedure are agreeable and that the company can meet them, otherwise this may void the agreement down the line.
Once accepted by the directors, it will then be filed with the Court. The CVA which has been accepted by the directors is granted, and signed copies of the proposal are sent to the creditors of the business.
Three weeks will pass before a decision is made and the outcome of the CVA is known.
What happens once the CVA application is approved?
If both the shareholders’ meeting and the creditors’ meeting receive the appropriate votes in favour of the CVA, the Insolvency Practitioner (also referred to as the Chairman) will report to the Court and all of the creditors of the company explaining what the outcome of the meeting was, who was present and how each member voted.
Once the CVA has been approved and agreed, any legal actions (e.g. winding up petitions) are frozen, unless the CVA is defaulted on. It is therefore imperative that you ensure you can meet the terms of the CVA and then continue to, otherwise legal actions can commence against you again.
The company must then make regular contributions to a trust account in order to make the payment agreed in the terms of the CVA. As long as the business continues to make the agreed payments, then it can carry on trading without the threat of being put out of business. If the payments are not made, it is likely that the company will be put into compulsory liquidation.
For a no obligation discussion about whether entering a CVA is right for you, call us now on 0300 303 8284. To get more advice or information, you can also contact The Insolvency Experts by email or web form on our Contact page.