Insolvency Practitioner

Wednesday, July 21st, 2010 at 0

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Insolvency Practitioner

An insolvency practitioner is a person who is both authorised and has the necessary security to act as an insolvency practitioner (IP) may be appointed in place of the official receiver as trustee or liquidator of an insolvent estate. The insolvency practitioner must be authorised by the Secretary of State (SoS) or a recognised professional body.

How is an Insolvency Practitioner appointed?

An Insolvency Practitioner can be appointed as a result of a meeting of creditors (or contributories, in company matters) or by the Secretary of State on the application of the official receiver.

In the event where the creditors fail to appoint an Insolvency Practitioner at a meeting, the official receiver may consider asking the Secretary of State for the appointment of an Insolvency Practitioner who will be selected from the rota of insolvency practitioners in that district, city or town.

An Insolvency Practitioner can also be appointed by the court on the making of an order by the creditors or the directors as well shareholders.

When does the Insolvency Practitioner become responsible for the case?

The Insolvency Practitioner becomes responsible for the administration of a case on the date that the appointment becomes effective and the official receiver should seek to handover as soon as possible after the Insolvency Practitioner's appointment. In most cases it is normal practice to handover on the day of the meeting or the date of appointment.

Moe Nawaz is the author of “The Insolvency Survival Guide For Businesses” and co-author of “Bankruptcy Guide” both available on Amazon.co.uk

Moe Nawaz is an Insolvency Auditor who has been helping business owners just like you for over 20 years to minimize their liabilities during and after any insolvency proceedings of your company.

He works with over 100 experts from insolvency practitioners, accountants, solicitors and banks to find the right solution for you.

How Do I Find The Right Insolvency Practitioner?

If there’s anything worse than facing business bankruptcy, liquidation, administration or a pre-pack. It is having to do so and then finding the wrong Insolvency Practitioner (IP) for the job. For many Insolvency Practitioner’s, business bankruptcy filings have become a volume business hence you will be just another battery when going through the production line, and debtors facing bankruptcy sometimes unfortunately obtain inferior legal services. For this reason, you’ll need to do some research before hiring an Insolvency Practitioner.

First of all let me point out for legal reasons the word business bankruptcy does not exist in English Law, the word bankruptcy is only related to an individual not a business or a Limited company. But for simplicity I am using the common terminology as used by the average person on the street.

Here are 10 tips to help you find the best Insolvency Practitioner to handle your business bankruptcy / Company Liquidation / Business Administration:

1. Don’t Delay and put this off finding an insolvency practitioner. The idea of hiring a Insolvency Practitioner has all the allure of having teeth pulled. But don’t let this prevent you from beginning your investigation for a good Insolvency Practitioner as soon as you know you’re going to need one. Waiting until the last moment won’t give a good Insolvency Practitioner enough time to adequately prepare your case or help you to rescue your business or even minimize your business and personal liabilities.

2. Seek the advice of other legal professionals. Ask yourself which business acquaintances you know, who might in turn know a Insolvency Practitioner. If you have a business accountant, that’s a good place to start. Understand, however, the insolvency and bankruptcy law is a specialty. If your accountant or solicitor offers to handle the case as part of your usual retainer, be certain he knows the Insolvency Law and is licensed by the Institute Of Insolvency Practitioners.

3. Find out who sits on your local Insolvency court panels. The only insolvency practitioners you’ll find on this panel will be well-respected insolvency practitioners who regularly appear in insolvency court cases. Also, get the names of insolvency practitioners on the local insolvency court’s debtor or creditor committees or from the official receivers office. The insolvency practitioners on these committees do it to attract more business, but these insolvency practitioners also take their work seriously.

4. Visit an Insolvency Practitioner or two’s offices. An office appraisal can give you vital clues as to how a Insolvency Practitioner would handle your case. Look around the office and see how well organised it is. Is it neat, or are there coffee-stained folders strewn about the floor? You wouldn’t go to a doctor with a dirty examining room; don’t hire a Insolvency Practitioner with a disorganised office.

5. Ask the insolvency practitioner a lots of questions. Once you have some insolvency practitioners in mind, ask them the following questions (The answers to each of these questions are critical, so if you get evasive answers, it’s probably a red flag that this is not the firm of insolvency practitioners for you):

a) Spend a day at the courts. Observing insolvency proceeding in action might give you an idea of the type of Insolvency Practitioner you want representing you. At the court you can also find out which local Insolvency Practitioner specialise in this form of law.

• What certifications do you have?

• How many insolvency cases have you handled?

• How many do you handle in a month or year?

• Of those, how many were business insolvencies?

• How much access will I have to you during my filing?

o If I’m not working directly with you, who will I be working with?

o Can I interview the person with whom I would be working?

o What time frame do you have for my insolvency case?

o How will the procedure work?

7. Evaluate the insolvency practitioners’ responses thoroughly. As mentioned, insolvency law can be a volume business, which means the time you’ll actually spend with a specific Insolvency Practitioner might be minimal compared to what you spend with a clerk or a legal executive. This is yet another reason to conduct a thorough interview process, and to carefully evaluate the responses. Did each insolvency practitioner answer you fairly and in sufficient detail? Do both the Insolvency Practitioner and the firm have the expertise you need? Do they appear overworked already?

8. Don’t hire the cheapest Insolvency Practitioner. Obviously, in this circumstance you don’t have a lot of cash to spare. But like most things in life, you get what you pay for. You want an insolvency practitioner who knows the system, and who will do the best job of representing you. That may end up costing a little more. The Institute of Insolvency Practitioners can probably help you determine whether a proposed fee is fair and in line with local standards. Anybody who charges too much or too little probably shouldn’t be your Insolvency Practitioner of choice.

9. Get fee specifics. Find out exactly what’s included in your Insolvency Practitioner’s fees and what isn’t. In some complicated proceedings, for example, a forensic accountant may be needed. If that’s the case, is it included in your charges or is it an additional fee?

10. Stay involved. Once you hire an insolvency practitioner, don’t be content to let him or her handle it alone. Double-check all filings. Did any of your creditors get dropped off the list? Staying on top of your insolvency filing will help ensure that the proceedings go smoothly and will keep your insolvency practitioner on his or her toes.

Plan of Action. The insolvency practitioner should map out a plan of action as well as advise you regarding the best as well as the worst possible scenarios, with the positives or pitfalls on the way. This is crucial since the future is at risk in any insolvency case and you should choose an insolvency practitioner who can put together a good plan as well as help you re-establish your creditworthiness.

The above advice should hopefully be helpful and assist you in choosing one of the best insolvency practitioners for you. Lastly, do not choose an insolvency practitioner solely based on location either because it is close to you or is in a prestigious neighbourhood. Make sure you hire the Insolvency practitioner for their skill and the level of comfort they offer you as the client. Their services will be priceless in the end. By Moe Nawaz

Simply contact the Insolvency Helpline for free expert & Confidential, no obligation advice.