Creditors’ voluntary liquidation (CVL) is a voluntary process that is available for directors of a company to instigate an orderly winding up of the company.  This process is normally utilised when a company is balance sheet insolvent and/or is unable to pay its liabilities as they fall due and the only option is to cease trade.

Directors should seek advice as to whether it is necessary to place a company into CVL as soon as they become aware that the company may be insolvent, as failure to do so may result in claims being brought against them for breach of duties or wrongful trading.

Where a rescue is not possible, our appointed appointed liquidator can assist directors with the formal liquidation process. This involves convening meetings of the company's members where resolutions are proposed to wind the company up and appoint a liquidator. A meeting of the company's creditors will also be convened in order to confirm the appointment of a liquidator.

The duly appointed liquidator will then seek to realise any remaining assets of the company for the benefit of creditors. 

The process of placing a company into CVL is relatively straight forward and can be done in a very short space of time.


An individual voluntary arrangement (IVA) is a process that is normally undertaken to avoid bankruptcy and allow a better return for the creditors than in bankruptcy.  An individual who is insolvent, or unable to pay their debts as they fall due, may put forward a proposal to their creditors for an IVA.  It is common that a proposal for an IVA will include the following provisions:

  • That certain personal assets are sold; 
  • A lump sum payment;
  • Payments over time; or
  • Payments from third parties.

The benefits of entering into an IVA may include:

  • Avoiding bankruptcy.
  • Certain assets not being sold, which would otherwise be sold in bankruptcy.
  • Some of the restrictions placed upon a bankrupt not applying, including restrictions relating to income, trading businesses and incurring debts. 

In order to put forward a proposal for an IVA the individual should appoint a nominee, which would be a qualified insolvency practitioner, who will review the financial circumstances and provide a proposal to the individual’s creditors. The proposal will include a recommendation as to whether or not creditors should accept the proposal for an IVA. JT Accountants can assist with appointing a nominee for you.

An IVA proposal will be considered by creditors at a meeting and for the proposal to be accepted 75% of creditors who cast their votes at the meeting must vote in favour of the proposal.  If the proposal is approved it becomes binding on all creditors.


Bankruptcy can often provide an individual with a sense of relief in the knowledge that they now have a “clean slate” with respect to their debts and can start afresh with their life in the knowledge that their financial problems have been appropriately dealt with and, to an extent, finalised.

Bankruptcy is a procedure which provides for:

  • A person to be released from his or her debts; and
  • The appointment of a suitably qualified independent person, normally a licenced insolvency practitioner, to act as trustee in bankruptcy.  The trustee in bankruptcy is responsible for realising the bankrupt’s assets (called the bankrupt estate) and the payment of funds recovered to the bankrupt’s creditors.

Individuals can either declare themselves bankrupt or a creditor who is owed money from an individual can file a petition at court for a bankruptcy order against the individual debtor.

The trustee who is appointed to an individual’s bankruptcy estate may realise the vast majority of the assets for the benefit of creditors. However, certain property is excluded from forming part of a bankrupt’s estate, including tools, books, vehicles and other items of equipment that are essential for the bankrupt to earn an income and ordinary household items such as clothing, bedding, furniture, household equipment and provisions that are necessary for satisfying the basic domestic needs of the bankrupt and their family.


A creditor who is owed a debt from a company of £750 or more can file a petition at Court to have the company placed into liquidation. 

This normally follows a formal demand for payment where the debtor company has not settled the debt (or reached an agreement to settle the debt)  within 21 days of service of the demand.

Following winding up, the Official Receiver automatically becomes the liquidator of the Company, however, the Court or Secretary of State may appoint a third party liquidator to deal with the affairs of the company. A liquidator is a qualified insolvency practitioner and is to act impartially and in the best interests of stakeholders at all times during the winding up of the company.  

It is the liquidator’s responsibility to attend to the following:

  • Take control of and realise the company's assets.
  • Conduct investigations into the company’s affairs.   
  • Report to creditors regarding the outcome of the investigations and the progress of the winding up. 
  • Distribute surplus funds (after the costs of the liquidation) to creditors in a fair and equitable manner. 
  • Act in accordance with The Insolvency Act 1986.

Creditors are able to nominate insolvency practitioners as liquidators of a company that has been wound up at court. JT Accountants have assisted in seeking a nominated liquidator, where a creditor has concerns regarding missing assets and/or the conduct of the directors involved.

If you would like more information or would like to ask us a question then call us on 0161 283 9639. JT Accountants take every care in making their recommendations and offering advice, any contract is bound between the selected accountant and the client.

JT Accountants cannot be held liable for any failure on the part of either of the parties concerned. JT Accountants is a trading name of JT Accountants Limited Company No. 06554865. Registered in England and Wales. Registered Office Flat 1, Sir Matt Busby Way, Old Trafford, Manchester, M16 0QG.

JT Accountants

Tel. 0161 283 9639
Suite 1, Sir Matt Busby Way, Old Trafford, Manchester, M16 0QG.