Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Voluntary arrangement definition

What does Voluntary arrangement mean? In practice, a voluntary arrangement is a negotiated, legally binding compromise of debts that lets a debtor pay in full or in part over time while avoiding bankruptcy or liquidation. The term is descriptive: in England & Wales and Northern Ireland it most commonly refers to a company Voluntary Arrangement (CVA) for companies and an Individual Voluntary Arrangement (IVA) for individuals, both statutory procedures under the Insolvency Act 1986 (and the Insolvency (Northern Ireland) Order 1989). In Scotland, CVAs are available, but individuals use protected trust deeds or the Debt Arrangement Scheme rather than IVAs. In Ireland, “voluntary arrangement”...

Company voluntary arrangements: termination or revocation, construction of terms, treatment of trust assets, and consequences for administration or winding up; supervisors’ duties and petitioning powers (England and Wales)

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

There is no definition of ‘failure’ of a company Voluntary arrangement (CVA) in the Insolvency Act 1986 (IA 1986).

The Act neither sets out when such failure is deemed to occur nor the consequences that would follow. Nonetheless, IA 1986 acknowledges that an arrangement might ‘come to an end prematurely’ (see IA 1986, ss 5(2A)(b), 6(3)). That situation is described as arising where the CVA ceases to operate because ‘it has not been fully implemented in respect of all persons bound by the arrangement’ (see IA 1986, s 7B). The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, govern CVAs and prescribe certain steps once an arrangement is terminated; within not more than 28 days of termination of the voluntary arrangement, the supervisor must give notice that the CVA has been brought to an end (see IR 2016, SI 2016/1024, r 2.44(1)). That notice must be accompanied by a report setting out receipts and payments and giving reasons for the termination. It must also contain a statement identifying the sum paid (if any) under the prescribed part mechanism in IA 1986, s 176A (see: IR 2016, SI 2016/1024, r 2.44(2))...

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Web page updated on 21/05/2026

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