In the UK, an insolvency practitioner (IP) is someone who is qualified by the courts to act in accordance with formal cases of individual or business insolvency and also to give advice on such matters. They often have backgrounds in accounting or the like, although it is not compulsory. In general, an IP is somebody that you never want to meet. Doing so most likely implies that you are in a severe state of indebtedness. Under the laws of the UK, Licensed Insolvency Practitioners are responsible for dealing with any and all of the following types of situations: bankruptcy, liquidations, individual voluntary arrangements, company voluntary arrangements, fast track voluntary arrangements, administrations, administrative receiverships and deeds of arrangement.
The most common use for an IP in the UK are IVA’s or Individual Voluntary Arrangements. When an individual is considering bankruptcy or personal insolvency, they may instead elect to enter into an IVA situation with their creditors. This means that, with the guidance of an IP, the individual is afforded the opportunity to repay debts to creditors at a discounted monthly payment schedule. The majority of the creditors must agree to the plan and it must be adhered to diligently. Throughout the course of repayment, the IP is the individual’s contact and financial confidant. The individual is responsible to honestly report all assets and liabilities to the IP.
The IP then determines payment scheduling and resource allocation. If you feel that you are about to meet an IP in your life, stop and think first. Think hard. Careful analysis of your personal financial scheme can often rectify the situation before an IP becomes necessary. Try to develop a new financial plan for your life. Try communicating with your creditors before it goes any further. Today is when to start. Once you have made the decision to involve an IP in your affairs, life changes and you are no longer in control.
Written by Ingrid Thomason. Find the latest information on
Insolvency Practitioners as well as
Insolvency UK
