The role of an insolvency practitioner

If you are insolvent it may be the case that the court chooses to appoint you an insolvency practitioner to deal with your debt problems rather than granting you bankruptcy. Companies and individuals can also approach an insolvency practitioner themselves, however it is highly important that you look into their qualifications and their track record.

In most cases, insolvency practitioners are either qualified accountants or solicitors, however nowadays it is possible for people to become a practitioner by taking a series of exams. Once they are fully qualified as a practitioner, they are subject to the control of the governing body, the Secretary of State for Business, Enterprise and Regulatory Form – also known as BERR. At present there are around 1,500 qualified and regulated insolvency practitioners in the UK.

Insolvency practitioners generally deal with the following financial problems;

• Liquidation

• IVA's (Individual Voluntary Arrangements)

• CVA's (Company Voluntary Arrangements)

• Bankruptcy

• Administrative Receiverships

• Administrations

• Deeds of Arrangement

In most cases an insolvency practitioner deals with cases of IVA’s advising their clients who have serious money problems on the next step of business recovery. They deal with the creditors directly so the company doesn’t have to deal with threatening phone calls, bailiffs or financial uncertainty. Their main aim is to help their clients become debt free, pay off their creditors and if possible avoid bankruptcy.

They don’t just deal with individual cases too and can be appointed to carry out the winding up – or in other words – liquidation of a company. These are most often referred to as ‘Official Receivers’ but are monitored by the insolvency service. They will take over the control of the company and oversee the financial process.

An insolvency practitioner will be called in if the official receiver discovers that a large amount of money is owed. They are appointed as the liquidator or trustee and wind up the company as required.

Insolvency practitioners recover their payments during the process and are able to decline any appointment if they feel there is not enough money in the business for them to be paid. In these situations the official receiver must continue with the case.

If the liquidation is on a voluntary basis then the insolvency practitioner is to be appointed as the liquidator. If it is a creditor voluntary liquidation then the insolvency practitioner will be appointed by them also.

Article Source: http://www.articledashboard.mk

Samual Bradshaw is the author of this article on Pre Pack Administration. Find more information about Winding Up Order here.

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