A business or individual experiencing financial difficulty will need the help of a licensed insolvency practitioner (IP) to support them through what is often a very stressful time. A simple Google search or a recommendation from a colleague could throw up many results and it’s important to ensure that any IP you choose is fully licensed and regulated by checking their details with the Insolvency Service website.
An ICAEW licensed IP is able to advise find insolvency practitioner on and take appointments in all formal insolvency procedures such as liquidations, company voluntary arrangements (CVAs), administrations, receiverships and bankruptcy. They are also able to assist in resolving personal debt problems through an individual voluntary arrangement (IVA).
To become a licensed insolvency practitioner, individuals will typically have backgrounds in accountancy or the law and will have passed a series of demanding exams. In addition, they will have completed a year’s work experience with a licensed insolvency practice. Insolvency practitioners can also support companies and individuals outside of formal insolvency processes and can assist with restructuring and reorganisations to avoid future insolvency.
As with all professional bodies, there are rogue IPs out there and there is a risk that some unlicensed individuals may be offering advice to those experiencing financial difficulties. Those who are not licensed and regulated can not be held to account if they give bad advice or even put people at risk of personal liability, such as disqualification as a director or even criminal prosecution.
Those who are unsure if their IP is properly licensed can visit the Insolvency Services website where they can search by the individual’s name, their known address and their licensing authority. The website will also display their Authorising Body number.
Individuals can also contact their local Insolvency Practitioner Association (IPAA) for recommendations of licensed IPs in their area. The IPAA is a membership organisation for licensed insolvency practitioners which sets the standards for the profession and deals with complaints against members.
An IP’s fees will vary depending on the formal insolvency process undertaken. The costs for a shutdown liquidation, for example, will be lower than those of a CVA or administration where the costs will continue to accrue each month until the conclusion of the procedure. The IP will also be chasing claims from creditors so it’s important that they are well-versed in insolvency laws to ensure they are gathering all possible information and evidence.
Individuals who are unsure about the quality of their IP’s work can make a complaint via the Insolvency Service Complaints Gateway. This will ensure that the correct RPB investigates the complaint. The Insolvency Service will also take complaints from any other source such as a solicitor or accountant. Ultimately, the Insolvency Service is responsible for further developing and maintaining insolvency standards from a regulatory, ethical and best-practice perspective. This includes the development of Insolvency Service guidance papers and codes of conduct.