Pros and Cons of Partnership Voluntary Arrangement

Pros

The advantages of a PVA are:

• Relieves stress of the partners from their creditors
• Allows time for reorganisation and restructuring of the partnership business
• Costs less than winding up the partnership or putting it into administration
• You and your partners retain control of the business
• You continue trading as usual
• Provides the partners with continued income
• Allows your creditors to get a better return
• Once the PVA is completed you will be debt free.
• An PVA protects you from legal action and acts as a safeguard to prevent you from losing your home and assets
• You may continue to have a current account although you will not be given an overdraft facility.

Cons

The disadvantages of a PVA are:

• You will have difficulties in obtaining further credit
• Breach of the arrangement can lead to legal action
• You can not dismiss some of the creditors
• The Insolvency Practitioner (IP) will often monitor your wage slips and if your income increases your payment into PVA will be expected to increase too.
• If a PVA fails then you may be made bankrupt.
• A PVA is set up and managed by an insolvency practitioner (IP). However, we will recommend the best IP for you.
• A PVA is legally binding on all parties.