Insolvency explained

If you are sick or injured, you don’t have to be a medical expert to know that you need to go to a doctor for treatment. You just instinctively know that you don’t feel well and that your GP will in all likelihood be able to help you. The process is simple: you go along to see your doctor. You describe your symptoms or condition, the doctor may ask you questions, may perhaps examine you, may initiate some tests, may offer you his or her diagnosis of your condition or injury, may prescribe medication or other treatment, may refer you to a specialist or a medical consultant or may send you to hospital.

You trust that the doctor knows what he or she is doing and you expect to have all procedures, treatments and medication explained to you in terms you can understand. You may have to deal with other medical or non-medical staff within the doctor’s practice and you expect that their services to you will be delivered in a similar competent and professional manner while preserving confidentiality and respecting your privacy. You may be scheduled for further meetings with your GP or other staff in the practice.

Financial health check

Insolvency ExplainedJust like you go to a doctor when you are unwell, an Insolvency Practitioner (IP) is the person to go to when your debts are causing problems. If your finances are not as healthy as you would like them to be, you don’t have to be a money expert or financial whiz kid to seek advice from an Insolvency Practitioner who you expect will be able in all probability to help you.

You can make an appointment to see an Insolvency Practitioner or Debt Advisor. Your initial appointment may be simply by telephone. You describe your financial condition and you may be asked some questions. The IP or advisor may want to examine your financial documentation (invoices, statements, loan agreements, HP agreements, mortgage documents, pay-slips, bank statements, creditor correspondence and so on) and may offer you an initial ‘diagnosis’ of your situation, in particular confirming whether or not you are insolvent. The IP may have to carry out some further tests such as obtaining further documentation and verifying your income and expenditure before suggesting a solution for your debts. They will most likely explain all of the various options that are open to you and it is then up to you to make the final decision as to which, if any option you go for. The Insolvency Practitioner will then implement any solution you decide to proceed with, if applicable. The IP’s staff will of course also deal with you in a similar competent professional manner while maintaining confidentiality and respecting your privacy.

While dealing with an IP is not a life or death matter like dealing with a GP might be, it is and should be a very positive process. Your IP could play a major supporting role in your life if you are encountering severe personal financial difficulties or even insolvency.

In considering whether to enter into an Individual Voluntary Arrangement (IVA) or to face the prospect of bankruptcy, you will be pleasantly surprised at how positive the process can be. There are many Insolvency companies that do not charge for advice and so you are free to walk away and incur no costs whatsoever. The IP emphasises the importance of you dealing with priority debts first and the range of solutions suggested may include re-mortgage, debt consolidation, debt management, bankruptcy, a Debt Relief Order and an IVA.

For more information or to speak to an advisor about your debts, get in touch with us at McCambridge Duffy.