A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
CVA vs liquidation - comparing your options
The comparison is really one question wearing two procedures: can the business fund its own rescue? A CVA bets future profits that it can; a liquidation accepts that it can't.
What each delivers
A CVA keeps the company alive - trade, jobs, and directors' control continue while creditors are repaid a proportion over typically three to five years, with the shortfall written off on completion.
A CVL ends it - assets realised, employees claiming through the government scheme within weeks, debts without personal guarantees dying with the company, and directors free to move on.
The honest comparison points
Certainty: a completed liquidation is final; a CVA is five years of disciplined trading with a meaningful historical failure rate - and a failed CVA usually ends in the liquidation that could have happened at the start, with creditors worse off.
Creditor outcomes: a good CVA should beat liquidation returns - that's the pitch that wins the vote - but only if the forecasts are honest.
Directors' exposure: both trigger no automatic personal liability, but note the trap - a CVA binds company creditors without releasing your personal guarantees.
The decision test
Profitable at operating level with a debt pile history created? CVA territory. Losing money before debt service? A CVA schedules the failure - the wider options guide and one honest conversation settle it.
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