AnswersWhen a client goes under
What is a CVA, and what does it mean for me as a supplier?
The short answer
Vote. A CVA is a deal, run by an insolvency practitioner, for a company to pay its creditors over a fixed period1 while it keeps trading. If three-quarters or more of the debt, by value, of those who vote7 says yes, it binds every creditor who was entitled to vote4, including those who voted no and those who were not sent the notice. So staying silent protects nothing, and you are paid what the proposal says, which can be well under the full debt.
England and Wales only. WolfX is software, not a law firm.
What you can add
A £7,200 debt, 30p in the pound
Say a company owes you £7,200 on invoices that fell due in July 2026, and owes £600,000 to unsecured creditors in all. If all of them vote, yours is 1.20% of the value: £7,200 ÷ £600,000. The proposal offers 30p in the pound over 36 months. That offer is an invented example, not a typical outcome.
If the company keeps paying, that averages £60.00 a month, paid on the dates the proposal sets. The proposal's prescribed-part estimate9 is the slice a liquidation would share among all unsecured creditors. Turn it into pence in the pound to compare: say £30,000 across £600,000 of claims is 5p, or £360.00 on your £7,200.
The road ahead
Seven steps. Only a challenge costs money.
Step 1: Email the insolvency practitioner
The pack names the practitioner who put the proposal together. Ask for the full proposal, how your claim is recorded for voting, the voting deadline and how to vote, and the payment dates. Use the email below, then put the deadline in your diary.
Step 2: Read the offer against a liquidation
The proposal must give its length, and the dates and estimated amounts of the payments9. When the directors put it forward, it must also estimate the prescribed part9: the slice of floating-charge assets set aside for unsecured creditors if the company went into liquidation instead.
Without the preferential creditor's agreement, a CVA cannot pay ordinary debts ahead of preferential ones3. HMRC's VAT and PAYE debts have ranked ahead of ordinary creditors since 1 December 202010. See who gets paid first.
Step 3: Work out your share of the vote
Votes are counted by the value of the debt7, not by head. Your share is your claim over the total of the claims being voted on: £7,200 of £600,000 is 1.20%.
The test that more than half the unconnected debt votes no7 leaves out creditors connected with the company, such as a director who lent it money.
Step 5: Check before you stop supplying
Once an approved CVA takes effect, a clause that lets you end the supply because of it stops working6. You also cannot make payment of old invoices a condition6 of further supply.
You may end the contract with the company's consent, or with the court's permission if continuing causes you hardship6. Some suppliers are excluded, and a contract dispute is a solicitor's question.
Step 6: Decide within 28 days whether to challenge
You can ask the court to revoke or suspend the decision if the CVA unfairly prejudices your interests5, or if there was a material irregularity in how the vote was run. The limit is 28 days5 from the day the reports reach the court, or from the day you learned of the vote if you were not given notice.
Step 7: Diary the payment dates
Payments reach you through the insolvency practitioner. If the company misses the agreed payments1, any creditor can apply to wind it up. A missed payment is the moment to ask a solicitor who does insolvency work.
A letter you can copy
Email to the insolvency practitioner about a CVA
Send it the day the pack arrives, and well before the voting deadline.
Tap a highlighted gap to see what goes in it.
Send it to the email address in the pack and keep the sent copy with your invoices. The email does not replace the vote form or any claim form. Return those the way the pack says, by the deadline.
When not to bother
When it isn't worth it
- It's a small debt and the pack takes longer than it's worth. Still return the vote form. It takes minutes, and the CVA binds you4 whether you vote or not.
- You hold security, or have a retention-of-title clause. A CVA cannot cut a secured creditor's right to enforce its security3 without its agreement. Retention of title is a separate question, so ask an insolvency solicitor.
- The company is in liquidation or administration, with no CVA proposed. Send your claim to the liquidator or administrator. If they propose one, vote.
- The invoice is disputed. The person running the vote can ask you for documents to back your claim8. Agree the undisputed part with the company if you can, and still vote by the deadline.
- You planned to sue for the full debt. An approved CVA binds you as if you were a party to it4, so read what the proposal says about claims before you start one, and ask a solicitor.
The Wolf's note
A CVA is a bet that the company is still trading when the last payment falls due. The deal binds you whether you vote or not, so use your vote. Read the offer beside the liquidation figures, and diary every payment date.
Mr. Wolf · the AI inside WolfX
What comes next
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Don't want to do this yourself?
The Wolf does every step for you. He works out the sums, writes the letters and keeps track of every date. Nothing goes without your yes.