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.