When looking for debt advice, it's common to see debt management plans advertised prominently from a variety of companies. It...
How financial difficulties can be resolved with the right help
Most people will never need the services of an insolvency practitioner (IP). A licensed Insolvency Practitioner is a problem solver, appointed to deal with the specific issue of a person or company being unable to meet their financial obligations and owing more than they can afford to pay. Lines Henry is a firm of Insolvency Practitioners established over 20 years ago as a merger between two long established firms.
Many Insolvency Practitioners are either accountants or lawyers, but practising in insolvency is a separate field entirely. To become an IP they must have satisfied the stringent requirements necessary in order to obtain their license to practice.
An Insolvency Practitioner; A lifeline to those in financial difficulty
When a business or individual finds themselves in financial deep water, an Insolvency Practitioner could well be the difference between sinking and swimming. Sometimes an objective approach by someone used to dealing with difficult debts can provide sufficient guidance to find a way to resolve the issue without formal procedures being implemented.
In all cases, it is better to speak to an IP sooner rather than later as this gives a greater chance of a precarious situation being resolved.
The IP will, first of all, analyse and assess the situation at hand. This will include finding out how the debtor became insolvent, what their obligations are, what assets they have and how much they can currently afford to repay.
If there’s a way to manage either the company or personal finances better, the IP will use the gathered information to make an assessment of what the best course of action might be and play a direct role in putting that plan into action.
Responsibility towards creditors
If formal insolvency procedures are implemented, the IP will play a pivotal role in what follows and adopt a formal position and perform specific duties depending on the circumstances. Nominee, Supervisor, Administrator, Receiver, Administrative Receiver and Liquidator are all positions which may be taken by an Insolvency Practitioner during the course of their duties and dependant on the types of insolvency with which they’re dealing.
In any case, the Insolvency Practitioner’s main obligation is to make sure the creditor’s interests are served and debts satisfied as much as is possible. What is in the best interests of the creditors, however, may not always be as obvious as might be assumed and ‘satisfied’ may not necessarily mean paid in full.
It may not necessarily be in the interests of creditors for an insolvent but otherwise viable business to be closed down, so an arrangement allowing the company more time to pay might achieve a better outcome than forcing business closure. An IP may attempt to make an agreement with creditors to reduce the funds they’ll accept in respect of the debt owed to them.
If a business cannot be saved and must therefore close, the IP will be directly involved in the sale of assets. The Insolvency Practitioner will do their utmost to get the best possible price for any assets that are sold. It is in the interests of the creditors that the IP recover as much money as possible to ensure they get repaid as much as is possible from the sale.
Get an expert on your side
If you or your company have found yourself struggling financially, it may well be the first time you’ve been in such a circumstance. For an Insolvency Practitioner, however, it’s unlikely they don’t already have significant experience of dealing with situations just like yours and your chances of securing a favourable outcome increase significantly the moment an IP is involved. Moreover, debt has a way of playing on the mind and causing daily worry, so getting an expert involved can lighten the load.
At Lines Henry, we understand that there’s never a comfortable time to talk about insolvency, but having that talk with us will relieve your burden of stress and serve as the first step on your road to a better outcome. Contact Talk to us and feel better.