Voluntary liquidation is when a company voluntarily decides to dissolve its assets and operations to pay off its creditors. Compulsory liquidation is a legal process that the creditors of a company initiate and the company cannot pay its debts and cannot agree on a repayment plan with its creditors. Creditors’ voluntary liquidation (CVL) is when a company’s creditors decide to liquidate the company’s assets to pay what is owed to them.