An insolvency practitioner is a person authorized and licensed to act in connection with an individual, a company or a partnership that is insolvent. In many cases, insolvency practitioners are specialists in accounting firms or accountants.
The insolvency practitioner should have the necessary licensing in this field having passed the set examinations. He should have experience in the field and he should also be associated with a regulator who is satisfied that he is actually fit to act in that capacity.
It is important that the IPs follow the law and the work done has to be monitored closely by the regulators so as to ensure that everything is done in accordance with the law. A regulator should be ready to monitor all the license holders to ascertain that they are indeed capable of carrying out the work.
What the job involves
The appointment of the IPs is aimed at sorting out situations that are quite difficult. Sometimes it is all about rescuing businesses. When this isn’t possible, the insolvency practitioner tries his best to:
- Sell assets of the company, partnership or person with debts
- Collect all money due to the company, partnership or person
- Agree all claims from creditors
- Distribute money that is collected after costs are paid
The work of an IP includes handling lots of interests, but the main thing is to handle the creditor’s interests. When creditors give all details of the claims they have, an IP only agrees such claims when he is certain that he will get the funds.
In most cases, advice is given to a debtor before the formal process of insolvency starts.
How to make a complaint regarding an IP
Before you make complaints against the IP, make sure you contact them directly. The concerns may be as a result of some misunderstanding about the role of the IP. It is a great idea to raise the issues with the IP himself as many things can be averted by dialogue.
A licensed IP can advise and undertake different appointments in all sorts of insolvency procedures and this includes liquidations, voluntary arrangements, bankruptcy, receiverships, and administration and so on.
This is the personal insolvency carried out after concluding petitions in court. This is usually the case when a person isn’t able to pay debts. The Most valuable properties are taken and then after the sale, the money is distributed among the creditors. When declared bankrupt, the person who is bankrupt cannot act as the director of the company. If they are individual traders, the trade must be in their name. The IP acts as trustee when it comes to bankruptcy.
This is the procedure where different assets are collected by an IP acting as the liquidator. The assets are then sold and money utilized in paying off creditors in a specified order. An order for liquidation is usually made by the courts. However, the directors can also decide to carry out liquidation themselves.
Other capacities that the IP can act in include an administrator, supervisor, and a receiver.