Insolvency Services

Company Voluntary Arrangements - CVA's

The objective of a Company Voluntary Arrangement (CVA) is to allow a company which either, has an underlying profitable business or is saleable, to maximize returns to creditors or, in some circumstances allow payment in full to creditors and the return of the Company to its directors. It allows the company to repay some or all of its historic debts from future profits over a period of time. Directors stay in control of the company.

A Company Voluntary Arrangement (CVA) provides the company directors with more time so preventing the creditors from taking enforcement action via the court system. It is a cost effective method for avoiding outright insolvency for a company with financial problems.

A Company Voluntary Arrangement (CVA) is a private matter, this will ensure the company does not appear in the press so avoiding negative publicity.

IVA's

Normally an alternative to bankruptcy proceedings, where someone makes a voluntary arrangement with their creditors through the law courts for the settlements of debts. An Individual Voluntary Arrangement (IVA) debars a debtor from obtaining any further credit during the next five years. This is to limit the overall liabilities of an insolvent debtor under IVA.

Bankruptcies

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or organization).

Administration

Administration is a very powerful process for control, where a company is insolvent and facing serious threats from creditors. The Court may appoint a licensed insolvency practitioner as Administrator, this places a moratorium around the company and usually stops all legal action for a 28 day period. The appointed insolvency practitioner then explores all avenues available being:

1. Restructure
2. Sale
3. CVA
4. Liquidation

Liquidation

Applies to companies or partnerships. It involves the realization and distribution of the assets and usually the closing down of the business. There are three types of liquidation - compulsory, creditors' voluntary and members' voluntary.

Sole trader protection scheme

Applies to Sole Traders that are taking the bankruptcy route who also has mortgage arrears and pending repossessions over them. GCS shall work with the clients in these instances and write proposals to the Mortgagee in order to potentially hold off repossession.