What is an Insolvency Practitioner?

An Insolvency Practitioner, also known as an IP, is an individual who is authorised and licensed to act on behalf of a person, company or partnership that can no longer meet their financial obligations (known as Insolvency).

What is an Insolvency Practitioner authorised to do?

An Insolvency Practitioner will usually work within a firm of accountants and is himself or herself an accountant or Insolvency specialist. They may act as

• an office holder in relation to an insolvent individual
• a trustee in bankruptcy
• an interim receiver of his or her property
• the nominee or supervisor or both of an IVA (Individual Voluntary Arrangement)
• a trustee under a deed of arrangement, a trust deed or a sequestration
• an administrator of a deceased insolvent estate.

An IP may also act in relation to a company or partnership and may be an office holder such as provisional liquidator, liquidator, administrator, administrative receiver, nominee or supervisor or both of a company voluntary arrangement or trustee of a partnership. Acting as an insolvency office holder without authorisation is an offence.

How is an Insolvency Practitioner qualified?

As well as holding a current license, the IP must have passed the Insolvency examinations which are held by the Joint Insolvency Examinations Board (JIEB). They also must have gained experience in insolvency work and satisfied an authorising body that they are fit and proper to act as an IP.

The Secretary of State for Trade and Industry may authorise an Insolvency Practitioner to act. Other authorising bodies include

• The Insolvency Service, The Insolvency Practitioners Association (IPA)
• The Institute of Chartered Accountants in England and Wales (ICAEW)
• The Association of Certified Chartered Accountants (ACCA)
• The Chartered Accountants Regulatory Board (for CAI)
• The Solicitors Regulation Authority of the Law Society
• The Institute of Chartered Accountants of Scotland
• The Law Society of Scotland.

These authorising bodies are also known as regulators and as well as issuing licenses to their own members, are also generally responsible for handling complaints about license holders, although this responsibility is limited since some such matters can only be decided by a court.

IPS must follow the law and their work is monitored by their regulator to make sure that they are fit to carry out insolvency work and to retain their license to do so.

So what do Insolvency Practitioners do that is so heavily authorised, licensed and regulated?

Their role and responsibility can vary widely depending on whether the insolvency is that of an individual person or of a company or partnership. Whether it is a personal or corporate insolvency the Insolvency Practitioner will usually be able to make an independent assessment of the financial position of the individual, partnership or company; to provide comprehensive information about the various procedures, processes and solutions that are available and their impact on the person (and their family), the partnership or the company; and finally to offer impartial advice on each of the available courses of action. Ultimately it is the insolvent person, partnership or company that decides which route to take but the IP can guide the decision making process.

Get Insolvency help

If you are thinking about dealing with your debts then get in touch with us at McCambridge Duffy. We have expert advisors who can assess your situatuion fully and can determine what the best option is for addressing your debt problems. All advice is free and confidential. Fill in the form on this page and we will contact you as soon as possible.