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When is an Insolvency Practitioner Appointed?
The court deals with insolvency cases by first appointing an insolvency practitioner rather than granting bankruptcy outright. Insolvency practitioners can be approached directly as well. However, you need to ensure that whoever you are approaching is qualified enough to deal with the case.
Insolvency practitioners are usually qualified solicitors and qualified accounts. In addition, they have to pass several exams related to insolvency. The Secretary of State for Business, Enterprise and Regulatory Reform (BERR) is the governing body that controls all qualified insolvency practitioners.
The cases that an insolvency practitioner deals with include:
- Administrations
- Administrative Receiverships
- CVA’s (Company Voluntary Arrangements)
- IVA’s (Individual Voluntary Arrangements)
- Deeds of Arrangement
- Bankruptcy
- Liquidation
In Scotland, insolvency practitioners also deal with Trust Deeds. This is because bankruptcy regulations and laws are slightly different there.
What an Insolvency Practitioner does?
An insolvency practitioner deals with cases of Individual Voluntary Arrangements under normal circumstances. They advise the best course of action to people with serious money problems. Creditors are dealt with directly. Therefore, pressure related to financial uncertainty and threatening phone calls are dealt with meticulously. The aim of an insolvency practitioner is to help his or her clients in paying off creditors, becoming debt free and avoiding bankruptcy.
They also deal with cases that involve the winding up of the company. The court can appoint an insolvency practitioner for such cases. The insolvency practitioner then takes control over the company.
Payments to insolvency practitioners are made through the money recovered during the company wind up. However, they can ask for money up-front or to draw fees over a period of time.
An insolvency practitioner is appointed as a liquidator if the case is of voluntary basis liquidation by the company. A liquidator is appointed when the case is solvent but the company is liquidating. The members of the board appoint them. The board members appoint an insolvency practitioner too, if it is creditor voluntary liquidation.
It is always best to settle for a insolvency practitioner from reputed firm because the chances for case settlement are more, otherwise, it may take years to finalize a case and you may incur fees that may run into thousands, and in many cases without any settlement!