If your limited company is insolvent, it can use a Company Voluntary Arrangement (CVA) to pay creditors over a fixed period. If creditors agree, your limited company can continue trading. For a CVA to be passed, at least 75% of unsecured creditors must agree to enter into the agreement. Creditors with security (such as banks) tend to be unable to vote as to whether in a CVA as their debt is secured. A CVA may be the ideal way to protect against legal actions taken by creditors. The terms of a CVA are likely to improve cash flow as creditors are bound by contract which often reduces monthly outgoings. When negotiating a voluntary arrangement, a full disclosure of the debtor’s assets must be made, and it is a criminal offence not to. The debtor must make an honest attempt to present a fair offer to the creditors. This offer is more likely to be approved if the outcome is better for creditors than the alternatives. The relationship you have with your creditors can significantly influence the outcome of the proposal. It is therefore crucial that discussions with these creditors are undertaken in a professional manner. If you believe that your business has a future, but needs some breathing space from pressing creditors, contact our team today to discuss this process. The earlier you make contact, the more we can help you.