How long does a typical CVA last?

Most Company Voluntary Arrangements run for a period of three to five years, although the exact duration depends on the company’s financial situation and the terms agreed with creditors. During this time, the company makes regular contributions, usually monthly or quarterly, to the insolvency practitioner, who then distributes the funds to creditors. The length of the CVA is carefully negotiated to balance affordability for the company with the need to return value to creditors. A shorter CVA may be possible if the company can raise significant capital from asset sales, while a longer one may be required if cashflow is weak but the business is viable in the long term. The arrangement is designed to give creditors better returns than they would receive in liquidation, while allowing the business to survive. Once the CVA has been successfully completed, any remaining unsecured debt included in the arrangement is written off, giving the company a fresh start.