Company Voluntary Arrangement (CVA)
What is a CVA?
If your company is struggling to pay its debts, a Company Voluntary Arrangement (CVA) might be the right debt solution for you.
Like with a standard or self-employed IVA, you pay one affordable monthly payment – usually for a period of 5 years – and then the unsecured creditors included in your CVA will write off the rest of your debts.
The difference between a CVA and an Individual Voluntary Arrangement is that a CVA is an agreement between your company and the people it owes money to. In a CVA, the company can also continue trading whilst repaying its debts.
Unlike an individual or a Partnership, a company is a separate legal entity – this means that the company directors are not personally liable for the company’s debts, unless they have personally guaranteed them.
A personal guarantee is an agreement that the director will personally repay the company’s debt if the company defaults on its repayments.
If a director has guaranteed the debts – but they don’t have the funds to repay them – it might be necessary for the director to consider entering a personal IVA or self-employed IVA, depending on their situation.
If you are a company director and struggling with your debts, contact PayPlan for FREE advice.
You are not alone – and our team have more than 20 years’ experience of helping people regain control of their finances. We can help you too – simply call us on 0800 280 2816, or request a callback via the ‘Get advice now’ button below.
Directors have a duty to act in the best interests of the company. This includes recognising when the company is struggling to repay it’s debts.
If the directors decide to continue letting the company trade (even though it can’t repay its debts) you may incur serious penalties – such as being disqualified from acting as a company director in the future.
If you want more information about CVAs – or need FREE advice on which debt solution is best for your own particular circumstances – get in touch with us. We offer an ear to listen and can tell you about all of your options.
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Benefits of a CVA:
- Continue trading – Your business will be allowed to continue trading, which may not be the case in other company insolvency solutions
- Affordable – Payments are based on what you can afford, so you can rest assured that you won’t have to get further into debt to pay your expenses
- Control – The directors remain in total control of the day-to-day running of the company
- Legal action is stopped – The company’s unsecured creditors can’t take any legal action against the company. This gives the directors peace of mind and protection from the company’s creditors. However, they may be able to pursue the directors if they have personally guaranteed any of the debts. In that case it may be necessary for the director(s) to enter an IVA themselves
- Lower costs – Costs are generally less than if the company is simply wound up, or enters an alternative insolvency solution
If you have business debts and are struggling with what to do next, get in touch with PayPlan.
We can help you keep your business running, while you repay your debts.
Call us FREE today on 0800 280 2816, or click on ‘Get advice now’ below.
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