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What Does an Insolvency Practitioner Do?

Insolvency practitioners (IPs) are responsible for the administration of insolvent companies and individuals. Their key role is to make sure that an insolvent company or individual pays back as much as possible to their creditors. This is done by investigating and assessing the financial affairs of an insolvent company or individual, collecting assets and ensuring that the debts of an insolvent individual or corporate entity are paid to the creditors in their entirety. Most IPs come from a legal or accounting background and must pass a series of gruelling exams in order to become licensed.

IPs are licensed to oversee both corporate and individual insolvency procedures, including liquidations, company voluntary arrangements, administrations and receiverships. They are also able to advise on and undertake appointments in individual insolvency procedures such as bankruptcy, individual voluntary arrangements and debt management plans.

In addition, an IP can help directors and shareholders of an insolvent company save their business by taking action at the earliest opportunity. This can involve a wide range of issues such as:

When choosing an IP, it’s important to consider their experience, reputation and approach. Choosing someone who specialises in your industry will help ensure that they have the knowledge and expertise to offer the best advice. You should also check that they are authorised to practice in your country. To do this, you can visit the government’s searchable database, which will allow you to verify an IP’s credentials by entering their name and license number.

Another factor to consider is whether an IP is regulated by an accredited body. This will ensure that they are bound by a code of conduct and are subject to regular inspection. In the event that you find that an IP isn’t meeting professional standards or is overcharging, you can also complain via the Complaints Gateway.

In the event that a complaint is brought against an IP, they must provide their account of events and explain their actions to a review panel. The panel will decide if the conduct is unacceptable and may take action such as disqualification or bankruptcy restrictions against the IP.

An insolvency practitioner duties are to act with honesty, integrity and objectivity and to promote the maximisation of value for creditors. They should also be able to demonstrate good communication skills and be able to work effectively with other members of their team.

While the vast majority of IPs perform their role with professionalism and sensitivity, disputes do occasionally arise. These disputes can destroy creditor value, impede the ability of an IP to operate and bring the profession into disrepute. Insolvency practitioners must be able to deal with these disputes cost-effectively and quickly in order to achieve their objectives. This is why it’s essential to have a dispute resolution framework in place to ensure that the interests of all parties are protected.

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