Company Voluntary Arrangement (CVA)

A Formal Route to Rescue a Viable Business From Unmanageable Debt

A CVA is not a last resort. It is a structured, legally binding tool designed specifically for businesses that have a genuine future — but whose debt position has become impossible to manage in the normal course of trading.

If your company is fundamentally viable but carrying arrears it cannot clear, a CVA may allow you to restructure those debts, protect your operations, and continue trading — without going into liquidation and without losing control of the business.

We work with directors to assess honestly whether a CVA is the right fit. If it is, we guide you through the process clearly and without pressure. If it is not, we will tell you that too.

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Is a CVA the Right Option for Your Business?

The directors who benefit most from a CVA are those whose business has sound underlying operations — good customer relationships, a reliable revenue base, a capable team — but whose accumulated debt has reached a point where normal trading cannot clear it.

Common triggers include significant HMRC arrears from a difficult trading period, a winding-up petition that needs to be addressed urgently, an onerous property lease that is dragging on profitability, or a combination of creditor pressures that individually might be manageable but together are not.

The critical question is viability. A CVA only works if the business can realistically generate enough cash to fund both ongoing operations and the agreed creditor repayments over the term of the arrangement. If it cannot, a CVA is not the right tool — and we will tell you so before you commit to the process.

Is a CVA the Right Option for Your Business?

What is a Company Voluntary Arrangement?

A CVA is a formal, legally binding agreement between a company and its creditors to repay a proportion of its debts over a fixed period — typically three to five years. It is initiated by the directors, supervised by a licensed insolvency practitioner, and approved by a creditor vote.

To be approved, the proposal must receive support from creditors representing at least 75% by value of those who vote. Once that threshold is met, the CVA binds all unsecured creditors — including those who voted against it or did not vote at all. This is one of the most powerful features of the procedure: a minority of dissenting creditors cannot block a proposal that the majority supports.

During the CVA, directors retain day-to-day control of the business. There is no administrator, no external manager, no loss of authority over trading decisions. The supervisor — the licensed insolvency practitioner overseeing the arrangement — monitors compliance with the terms and manages distributions to creditors, but operational control remains with the management team throughout.

Why Directors Choose a CVA

Director control is preserved. Unlike administration, a CVA does not displace the management team. You continue to run the business day-to-day throughout the arrangement.

Legal action is halted. Once a CVA proposal is in motion, it can stop or suspend creditor enforcement actions — including winding-up petitions. It gives the business the breathing space it needs to implement meaningful change.

It is a powerful restructuring tool. A CVA can be used to renegotiate onerous lease obligations, address significant HMRC arrears, and manage complex multi-creditor debt positions in ways that informal negotiation rarely achieves.

Remaining debts are written off on completion. Once the terms of the CVA are met in full, any outstanding balance of unsecured debt included in the arrangement is formally written off. The business emerges from the process on a clean financial footing.

Is a CVA available to your business? Our first conversation will give you a clear, honest answer — based on your actual trading position, not a general rule.

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Why Directors Choose a CVA

Expert Advice, Delivered Personally

The Insolvency Practitioners is an independent national firm led by Michael Chamberlain – one of the UK’s most experienced insolvency professionals. With over 30 years of practice, Big 4 pedigree, and a consistent track record of successful business turnarounds, Michael built this firm on one belief: that directors facing difficult decisions deserve honest, expert advice delivered with humanity, not judgement.

Every director who contacts us speaks to Mike directly – not a junior, not a call handler. That is not something every firm can say.

“Thirty years in insolvency, and the conversation I have most often isn’t about CVAs or liquidations. It’s with a director who knew something was wrong six months ago and didn’t know who to call. That delay almost always makes things harder.”

How the CVA Process Works

Once we have assessed your position and agreed that a CVA is the right route, the process follows a clear sequence.

  1. Appointment of a nominee. You appoint a licensed insolvency practitioner — the nominee — to assess the company’s viability and prepare the formal proposal.
  2. Proposal formulation. Together, we draft the CVA proposal: a plan that is fit, fair, and feasible, setting out how creditors will be repaid over the term of the arrangement.
  3. Creditor voting. The proposal is put to a creditor vote. We manage the correspondence and virtual meetings throughout.
  4. Supervision. If approved, the nominee becomes the supervisor — overseeing implementation, monitoring repayments, and managing distributions to creditors.

Completion. Once the terms are met in full, the remaining unsecured debts included in the arrangement are written off and the company continues trading debt-free.

Ready to Find Out if a CVA is Right for You?

Our first conversation costs nothing and commits you to nothing. It will tell you clearly whether your business is a viable CVA candidate – and if not, what the alternatives are.

Speak to Michael Chamberlain – book a free, confidential call

Not yet sure whether a CVA or Administration is the right route? Our Rescue My Company page explains both options side by side.

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Let’s slow this down and go through it together. 

Your enquiry is strictly confidential. We will never share your details with third parties or creditors without your explicit instruction.

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What happens next? Mike or a member of the team will review your details and call you back for a quiet, professional conversation about your company’s future.

FAQ's

Can I use a CVA if HMRC is threatening a winding-up petition?

Yes - and acting quickly is important. A CVA proposal in motion can halt HMRC enforcement actions and demonstrates to HMRC that you have a structured, creditor-approved plan to address the arrears. HMRC is a significant creditor in many CVAs and will engage constructively when presented with a credible and realistic proposal.

How much does a CVA cost?

CVA fees cover the nominee's work in preparing and putting the proposal, and the supervisor's ongoing work managing the arrangement. Fees are typically funded from the CVA contributions themselves rather than paid upfront by the directors. We provide a clear, upfront indication of costs before you commit to anything.

How long does a CVA last?

Most CVAs run for three to five years, depending on the level of debt and the repayment terms agreed with creditors. The nominee phase — from instruction to creditor approval — typically takes four to eight weeks. We will give you a realistic timeline based on your specific creditor position.

Does a CVA affect my company's credit rating?

Yes, a CVA will be noted on your company's credit record, which can make it more difficult to obtain supplier credit in the short term. Most directors find this a necessary trade-off to preserve the business. We will help you weigh this against the alternatives before you decide.

What happens to secured creditors, like my bank?

A CVA cannot bind secured or preferential creditors without their explicit consent. During the proposal stage, we communicate with your bank and any other secured lenders to ensure the plan is integrated with existing secured lending arrangements.

What is the difference between a CVA and Administration?

In Administration, an administrator takes control of the business and the directors step back. In a CVA, the directors remain fully in control throughout. Administration can be initiated faster and provides an immediate legal moratorium, whereas a CVA requires creditor approval before its protections take effect. Which is right depends on the urgency of the situation and the nature of the creditor pressure.

How likely is a CVA to succeed?

CVAs have a significantly higher success rate when the underlying proposal is realistic — when the business can genuinely fund repayments from future trading without squeezing working capital to breaking point. Some CVAs fail because the proposal was too optimistic or because the underlying business model was not addressed alongside the debt. Our role is to give you an honest assessment before you proceed, so you do not enter an arrangement that is unlikely to be completed.

What happens if the company cannot meet its CVA repayments?

If the company falls behind on CVA contributions, the supervisor can call a creditors' meeting to vary the terms — or, if the breach is material, the CVA can fail. A failed CVA typically leads to liquidation. This is why a realistic proposal matters more than an ambitious one: we would rather the arrangement be achievable than impressive on paper.

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