How Do I Get Out of My CVA If I’m Behind With My Contributions?
If your Company is in a Company Voluntary Arrangement (“CVA”) but you are falling behind with your monthly contributions, or you are currently up to date with CVA contributions but unhappy with the terms of the CVA, then your CVA was probably miss-sold.
Unfortunately many insolvency practitioners sell a CVA on the basis that it is the best recovery process to businesses struggling with debt. However, the truth is that the success rates of CVA’s are really poor and they are often sold by IP’s due to the IP being able to charge a fee for it then charging a second fee for an alternative insolvency process once the CVA fails. This is not the practice of Bridge Newland; CVA’s are only ever proposed by us if rigorous cash flow forecasting is done to establish if the CVA is certain to be a success.
If you wish to Get out of a failing CVA or wish to end your CVA in order to go into another insolvency process then you do have options, so don’t worry, speak to the experts.
Is my CVA Failing? Was my CVA Miss-Sold?
The basic test of this is whether you can afford to maintain the monthly contributions required to pay to the CVA Supervisor as a failure to make your contributions will almost certainly be considered a breech of your CVA proposals and therefore a cause for the supervisor to fail the CVA and petition to wind up your company.
Our experience suggests that a company in CVA will usually fall behind with CVA payments because they become uncomfortable with paying all of their profits into an arrangement which they could avoid and start with a clean slate through other insolvency procedures. Often companies in CVA can also experience problems in obtaining credit, lower sales and higher costs as a result of stakeholders being aware of their CVA and therefore if these factors apply to you, you are not alone.
Now often the above factors could simply be as a result of unrealistic forecasting or unforeseen issues and therefore your CVA may not have been miss-sold. In this instance, I would recommend that you contact your current CVA supervisor who will help you to work through your issues and find a solution for you. However, if you feel that the work done by the insolvency practitioner dealing with your CVA was poor or unrealistic, and you are concerned that you may not be able to continue to meet the terms of the CVA then give us a call as, you have many options and we will find the solution right for you.
To access whether your CVA is in breech (and therefore failing) you should review the terms of your your CVA proposals as this will specify what causes the CVA to fail and therefore in what instances the Supervisor should seek to terminate your CVA.
My CVA was Miss-Sold – What are the Solutions?
CVA to Administration or Liquidation?
The most common solution for a failing CVA is to place the Company from a CVA to Administration or Liquidation however this can only be done in certain circumstances and should therefore be discussed with one of our trained professionals.
Closure, then Restart?
Another option is to end the CVA and close the business then start again with a new company or continue with other businesses which you may have. To discuss the effects of this and the legal implications give us a call.
Given that approximately 60% of CVA’s fail throughout the country, you are not alone, therefore contact us on our free phone number 0800 612 6197 for more advice on how to get out of your CVA but save your business.