IVA Glossary
C
Company Voluntary Arrangement
The company voluntary arrangement presents a solution for companies who are facing high debt issues. It is similar to an individual voluntary arrangement, which presents a solution for an individual who faces high debt issues.
Rebuilding the sales and profits when a company has to deal with unsolved debts is very difficult; this is why many companies see as a viable solution the company voluntary arrangement. When such an arrangement enters into force, it means that the credit collection departments are no more allowed to harass the company in order to pay back debts to creditors. It is an arrangement between the debtor company and its creditors, and it is usually settled through a new repayment schedule, which is affordable to the company, and the creditor agrees to this schedule.
In most of the cases, the company continues its activity, and agrees to pay back the creditors from the profits that will incur. The company will usually set up a repayment schedule proposal together with a professional insolvency practitioner or other professional body, and the creditors will most likely accept it in order to be able to recuperate their losses fully or partially. A CVA represents the best insolvency measure for a company facing debt issues.
Rebuilding the sales and profits when a company has to deal with unsolved debts is very difficult; this is why many companies see as a viable solution the company voluntary arrangement. When such an arrangement enters into force, it means that the credit collection departments are no more allowed to harass the company in order to pay back debts to creditors. It is an arrangement between the debtor company and its creditors, and it is usually settled through a new repayment schedule, which is affordable to the company, and the creditor agrees to this schedule.
In most of the cases, the company continues its activity, and agrees to pay back the creditors from the profits that will incur. The company will usually set up a repayment schedule proposal together with a professional insolvency practitioner or other professional body, and the creditors will most likely accept it in order to be able to recuperate their losses fully or partially. A CVA represents the best insolvency measure for a company facing debt issues.
