www.iva.co.uk

I have a small construction company which has about £20k in debts to unsecured and an overdraft which is secured.

2 of the creditors are VAT and Tax Man, with about 6 others to smaller suppliers.

I have new jobs about to start and more in the pipeline. In this climate I am really lucky to win this work but its because I have kept hanging in there.

I wont be able to hang in there much longer, I cant pay the creditors and if I fold the company I will not be able to do the new jobs. I would like to do a CVA as soon as possible to ease cashflow.

The costs I have seen are about £2k plus and I cant afford that is there a cheaper way where I do most of the work and you do the legal stuff. We are not a big concern so it should be straight forward.

I dont know where else to go and hope that there is an IP out there who can help.

Thanks.

If you are going for a voluntary arrangement then the IP has to do all the work.

Costs are usually factored in to the repayments and are agreed with the creditors. You should not have to pay anything upfront.

There are several IP's who post on here. Check out the experts link which can be found on the left hand side of the page here. Give one or two a ring and they will advise you of all your options.

There are not that many CVA's proposed these days, but the principle is similar to the IVA in that the costs are paid out of the payments made into the arrangement. I am suprised that you would have been quoted fees of as low as £2,000 to be honest, as there is rather a lot of work involved in proposing one, and with debts of only £20,000 I do wonder if this is an appropriate solution for you.

Where have you got the idea of a CVA from, and have you actually been professionally advised?

Well if the proposal for an CVA is to halt payments to all your creditors for a set period whilst new work comes in and allows you the cash flow to fund the new work to enable your existing creditors to obtain full payment then a CVA is possible, The £2,000 fee is very cheap under those circumstances and if an IP is willing to put a CVA forward based on that (without any upfront payment) - then try it!

Let us know how you get on - it would be interesting to know.

I dont have an IP at the moment and was hoping this would be a way to halt payments whilst the new job starts so that I could pay the creditors back in full.

I just looked into CVA on the net. Two of our companies that we have been working for have had winding up petitions against them so we will be losing out with them.

I dont want to chuck in the towel when I have potential for more work with viable companies.

I assume that you mean that two of your customers are also struggling financially? One of the key factors of making a CVA work is to have a viable business in the first place, so you do really need to consider this when deciding whether it is a sensible route - which an IP will help you to do of course.