Skip links

CVA vs Liquidation


The differences between a CVA & Liquidation process

A Company Voluntary Arrangement (CVA) is a business rescue procedure that enables viable companies experiencing temporary financial difficulty to restructure their debt whilst continuing trade.

Liquidation, on the other hand, results in business closure following the sale of assets. Creditors are repaid from the proceeds as far as possible, and the company removed from the register at Companies House.

If you believe your business is commercially viable and can regain momentum given some time and space you may be eligible for a CVA, but is the choice between CVA vs liquidation so straightforward?

Here’s a little more detail about the two procedures to provide a clearer picture.

Get Started Today

Putting creditor interests first


A Company Voluntary Arrangement can provide better returns for creditors even though only a proportion of the total debt is repaid. The remainder is written off but the overall plan can benefit them as they receive regular monthly payments, albeit at a lower rate than the original contractual repayments. Additionally, under a fast track CVA these can start quickly.

A further benefit for both creditors and the company is that trade doesn’t cease under a CVA. Customers and suppliers can be retained – an aspect that’s usually equally important to suppliers as to the debtor business.


Company liquidation, even when undertaken voluntarily, means the business is closed down following the sale of assets. Creditors might receive a return, but it’s often the case that unsecured creditors receive nothing at all from this process.

Waiting too long to take action when your company is in decline can limit your options, so it’s important to proactively seek professional help. Our team at Fast Track CVA can advise on whether your company is eligible for a CVA, providing sound guidance and support.

CVA vs liquidation: how each process can affect directors


Dealing with financial difficulty and relentless pressure from creditors is stressful for you as a director, but if you feel your company could return to profitability a CVA provides light at the end of the tunnel.

Entering a fast track CVA is a positive step that provides a clear path out of business debt. The insolvency practitioner’s proposal to creditors includes carefully calculated and realistic cash flow projections, demonstrating that repayments are affordable for the company for the long-term.


Unfortunately, liquidation means the end for your business and can affect company directors in various ways. Part of the appointed office-holder’s duty during liquidation is to investigate the conduct of directors during the time leading up to insolvency.

If misconduct or wrongful/unlawful trading has taken place you and other directors could be held to blame for the company’s decline, with the potential for personal liability, disqualification, and the ensuing reputational damage.

CVA vs liquidation: eligibility

Ultimately, a professional assessment of your business’ financial position and viability will determine the best way forward. Fast track CVAs are an effective way to restructure debt, streamline a business, and improve cash flow, whilst liquidation brings to a close a financial decline and creditor pressure that’s unrelenting.

To find out more about fast track CVAs and whether you’re eligible, please contact one of our licensed insolvency practitioners at Fast Track CVA. We’re insolvency specialists and can offer you a free same-day consultation to quickly establish whether a CVA is appropriate for your company.

Contact Us Take the Assessment

Sectors using Fast Track CVA





Financial Services