What Does an Insolvency Practising Lawyer Do?

In a civilised society where credit is available there will inevitably be debt. An insolvency practioner acts as the civilised mechanism for resolving bad debt. They can perform various duties, from providing advice in an attempt to save a company to taking control of a failing business before winding it up.

Licensed insolvency practitioners (IPs) offer expert advice and guidance on the best way to resolve a financial crisis, whether it is a company or individual who is insolvent. They are regulated by their authorising body to ensure their work is of the highest standard.

Understanding the Role of an Insolvency Practitioner: Key Insights

They are also able to offer solutions such as a company voluntary arrangement (CVA) to help struggling companies. An IP will work with the company directors to prepare a CVA proposal and then distribute it to creditors who are then allowed to vote on whether to accept it or not. They are then responsible for implementing the CVA by collecting monthly contributions from the company, making distributions to creditors and managing any breaches of the terms of the agreement.

An IP’s main obligation is to the creditors of the insolvent company or individual and not the directors, so they will take every step necessary to find funds to reimburse them. They will communicate with creditors on behalf of the company or individual and sell assets to repay them. They will then distribute any remaining funds to the creditors. They will also investigate the conduct of directors in cases of corporate insolvency and may recommend company Director Disqualification proceedings or Bankruptcy Restrictions be taken against them.

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