What is an Insolvency Practitioner and what can they do for you?
If you’re in debt and exploring an IVA as a debt management solution, you will have to contact an Insolvency Practitioner (IP). They will work as the intermediary between you and your creditors and ensure that the terms of the IVA are being adhered to. In the UK, IPs are the only individuals licensed and authorised to act in relation to insolvency procedures, either corporate or individual. To find out more about the role of IPs, how they are trained, what regulations they work under, and what role insolvency software plays in their day-to-day business lives, look no further than this blog.
How are IPs trained, what is their background and how are they regulated?
Insolvency is an incredibly demanding career path – it is challenging and requires a significant degree of training, but it can also be truly rewarding for those seeking to help individuals and industries in debt. Due to its demanding nature, it is one Britain’s smallest professions, with fewer than 2,000 licensed IPs working in the UK today. Under existing British law, all IPs must have a license, have passed a stringent set of accountancy and insolvency examinations, have experience with insolvency, and have satisfied a regulator (an authorising organisation) that they are capable of carrying out their role. The Institute of Chartered Accountants is the largest regulator of IPs in the UK, but there are seven professional bodies that can issue licenses.
IPs generally have an accountancy or legal background, though there is no direct entry route into the profession. Once qualified, all IPs remain subject to inspection and oversight by their recognised professional body. IPs must comply with Statements of Insolvency Practice, act within its ethics code and take guidance issued by it. Education is never quite complete for an IP; they are continually learning and undergo a yearly review of their authorisation.
What does an Insolvency Practitioners do on a daily basis?
IPs usually focus on one of two areas: corporate or personal insolvency. Corporate insolvency deals with company debt problems. In essence, their main function is to rescue a business. However, if this can’t be done, an IP aims to close down the business, liquidate the company’s assets, collect money due to the company, agree creditor’s claims, and equally distribute the money to the creditors, all the while acting in the best interests of the business’ creditors.
An IP dealing with personal insolvency is often an Individual Voluntary Agreement (IVA) specialist. In this respect, an IP is responsible for ensuring that the terms of the IVA are being met and that all creditors receive their share of the individual’s monthly repayment. Personal insolvency also involves matters such as bankruptcy, trust deeds, administrations, and deeds of arrangement.
How does insolvency software assist an Insolvency Practitioner?
Insolvency software, or debt management software, such as LogiDebt can be used by an IP in order to streamline day-to-day processes, facilitate workflow, and increase overall compliance. With insolvency software, data is centrally stored and IPs are able to easily and quickly track client income, expenditure, assets and dependents. The software also allows the user to cross-reference this data with creditors, automatically generating payment plans using Best Advice Model (BAM).
As IPs are busy, and may have a number of clients at one time, software is essential to effectively track client communication and relevant deadlines. It is highly scalable to a growing business and due to the automated nature of the software, Management Information (MI) is facilitated, greatly impacting overall efficiency. LogiDebt, like all good insolvency software, is highly intuitive, user-friendly and customisable to fit in with each business’ individual needs.
