How To Find an Insolvency Practitioner

Type ‘debt problems’ into the search bar and you’ll be hit with numerous companies and organisations that can help you or your business. But which one is best?

If you’re heading for bankruptcy, or insolvency is looming for your company, you’ll know that you need a mix of financial expertise, some legal input, and good strategic planning. 

Insolvency practitioners are qualified and licensed to handle bankruptcies and insolvencies in all their multiple aspects. This article examines how to find a licensed practitioner and verify their service.

At Helix Law we deal with and come across insolvency in multiple ways. Typically we either force people or company debtors into insolvency, or we defend claims against that type of insolvency process. We are not Insolvency Practitioners, but we liaise with IP’s after insolvency has been confirmed.

What Is an Insolvency Practitioner and What Can They Legally Do?

Typically, an insolvency practitioner (IP) is a licensed professional who helps individuals and businesses manage debt problems. This service is a few levels up from simple debt advice and counselling and includes managing court orders and legal procedures.

An IP is qualified and authorised to carry out administrations, voluntary arrangements (VAs), individual bankruptcies, and company liquidations.

An insolvency practitioner will take charge of the situation and find the best financial outcome for your situation, even down to dealing with creditors. Everything they do must comply with the law.

IPs legally owe a duty to creditors and act on behalf of potential bankrupts or companies heading towards insolvency. Their main obligation is to find the best possible outcome for creditors that is fair and minimises costs.

Even though you pay an IP to help you, their duty is not contractual and they have limited duties to you. Their primary duty is to your creditors or the creditors of the company. Creditors have the power to replace an IP if they are dissatisfied with the conduct of the insolvency process.

Licensed vs. Unlicensed: How To Spot the Difference

It’s not unusual for debt management companies to convey the impression that they are licensed insolvency practitioners when they aren’t. The best way to be certain is to double-check with the different licensing bodies.

Debt experts entice people with the promise of an insolvency service, but may just pass your details on to a licensed firm, leading to delay and extra costs. You also run the risk of receiving advice that is incomplete or inaccurate.

Licenses are issued by certain professional bodies, including the Insolvency Practitioners Association (IPA) and the Institute of Chartered Accountants in England and Wales (ICAEW).

By law, only licensed IPs can provide this service, including all the legal procedures that go with it. They must adhere to strict regulations and are regularly assessed by their professional body.

Because of the legal elements involved in this role, it’s easy to think that a solicitor is automatically an IP, but this is not the case. The same applies to accountants.

Insolvency is a specialist area that requires specific and demonstrable expertise. Some good starting points for finding a registered IP include the Insolvency Practitioners Association website, the ICAEW directory of licensed IPs, and the gov.uk Insolvency Practitioner Register.

If you are beginning your search, you can look by name, town, or company. If you’ve already found an IP, you can check that they are fully licensed.

What To Look for in an Insolvency Practitioner

A search will likely yield a few names in your local area, so how do you choose the right one for you, and what should you look out for?

Browse their website to ascertain whether their services are transparent and well-explained. A good IP should be able to communicate sometimes complex concepts clearly and free of jargon. The cost of the service should also be transparent and easy to understand.

Drill down into the details and find out about their experience, qualifications, and the type of people and businesses they help. It’s often beneficial to choose a practitioner with experience in your industry who understands your business sector.

Check out their client reviews and testimonials on authentic sites like Trustpilot.

A good IP will offer tailored solutions to suit your unique position, aligning with your specific requirements and longer-term goals, not a ‘one-size-fits-all’ approach.

The Benefits of Working With a Licensed Insolvency Practitioner

Knowledge and Expertise

Your IP will have a detailed and thorough knowledge of insolvency laws and regulations, enabling them to help you navigate this complex landscape. 

IPs must act in the best interests of all parties. They will protect your position to the extent that it does not conflict with achieving the best outcome for creditors.

Full Legal Services

You can be confident that their actions are fully compliant with the law and won’t expose you to the risk of repercussions and penalties later.

Licensed and Insured

The licensing process ensures IPs are properly qualified and experienced. They also must carry special insurance, often referred to as a bond.

The bond is a surety policy approved by the Secretary of State that covers their actions and protects against them and your creditors against fraud, dishonesty, and negligence and losses to the insolvent estate that stem from this.

The Downsides of Working With a Licensed Insolvency Practitioner

IPs owe statutory duties to act in the best interest of creditors, and their business model, beyond the initial fee for their services, will be to recover further fees and costs as part of a bankruptcy or insolvent liquidation through investigating the affairs of the bankrupt and/or the insolvent company to discover claims against the bankrupt, or the company’s shareholders and/or directors and/or 3rd parties and to pursue those claims for the benefit of creditors. 

Red Flags To Look Out for From Unlicensed Advisers

• There will be a lot of generic information about debt management and solving debt problems, but no clear detail on the services offered. Often, these companies are just a portal that passes the work on to a licensed IP for an inflated price.
• An unlicensed adviser won’t mention a membership to a professional body.
• There are often significant fees upfront for advice, which is quite generic and general.
• There will be pressure to sign up quickly without a proper review of your situation.

Frequently Asked Questions

Is an Insolvency Practitioner a Solicitor?

An insolvency practitioner is a different role to that of a solicitor. An insolvency practitioner is a licensed individual with expertise and qualifications in all aspects of the insolvency process. An insolvency solicitor is a qualified professional providing legal advice in insolvency matters. Their duty is to their client, whereas an IPs is to creditors. We cannot assist if you are looking for an Insolvency Practitioner. 

If you or your company are being threatened with insolvency but dispute what is said- it might be that we can assist you. Our commercial litigation team act for creditors owed money, and debtors who dispute owing debts, nationwide. We are experienced pursuing insolvency and in defending it. If we can assist you contact a member of our team today and we will be happy to help.