Creditors Voluntary Liquidation

A solution to creditor pressure

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Creditors Voluntary Liquidation

Directors may voluntarily liquidate when faced with creditor pressure that's overwhelming.

Insolvent liquidation: where the company is insolvent (can’t pay its debts), a creditors voluntary liquidation (CVL) is used to achieve liquidation. This is not the only solution though to creditor pressure. With advice from insolvency practitioners (like us), a company voluntary arrangement (CVA) or a pre-pack / company administration could still allow for turnaround.

CVL pre-appointment costs

Creditors voluntary liquidation benefits

  • A CVL prevents further losses being incurred, acting in accordance with director duties.
  • Allows for a speedy resolution and remote attendance.
  • The liquidator has the responsibility of dealing with the creditors and employees.
  • As directors have control, they can choose their liquidator and will deal with the same appointed Insolvency Practitioner throughout the CVL process.
  • Directors can share information with creditors by way of a company trading history and a statement of affairs, providing clarity.
  • A CVL enables employees, including directors in some circumstances, to claim: unpaid wages, outstanding holiday pay, compensation for loss of notice and redundancy pay.
  • If the directors, shareholders or even employees wish to purchase assets, this can be discussed with the liquidator, as can any offers from an independent agent.
  • 6 benefits of choosing us for your creditors voluntary liquidation.

0121 201 1720 for CVL advice & action

Creditors voluntary liquidation costs

What a CVL costs & funding a CVL.  

Creditors voluntary liquidation process

At its start..

A creditors voluntary liquidation requires trading to cease as soon as possible to avoid wrongful trading. A special resolution will be passed at a general meeting of the members to confirm the company can’t continue due to it liabilities and a licensed insolvency practitioner is appointed as liquidator.  Any redundant employees will receive payments from the Redundant Payments Office.

During a creditors voluntary liquidation

The creditors will also have the opportunity to attend a virtual meeting by means of a conference call to consider resolutions. The creditors will have been provided with a report and a statement of affairs prepared by the directors.

At its end.

The liquidator will realise the assets and make a distribution to creditors where possible. Once the liquidation is concluded, the company will be dissolved.

In a creditor voluntary liquidation, the Gazette is used to give notice of the special resolution to wind up the company voluntarily.

What is a creditors voluntary liquidation? A solution to creditor pressure.

CVL advice & action 0121 201 1720

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