If you’re facing insolvency, you’ll likely want to work with an insolvency practitioner to help you resolve your debt situation. Many people will be recommended an IP by their accountant or solicitor, but it’s always worth doing your own research to ensure you choose a reputable and licensed insolvency practitioner. The government have a fully searchable database that you can use to check an insolvency practitioner’s credentials. You should also seek legal advice if you’re under investigation by the Insolvency Service to ensure you understand your legal rights and obligations.
The Insolvency Service investigates company insolvencies, individual bankruptcy and Debt Relief Order cases on behalf of the Department for Business, Energy & Industrial Strategy (BEIS). The service operates across England and Wales from offices in London, Manchester, and Plymouth. Its investigative activities include examining company records and transactions, arranging interviews with stakeholders, and seeking recompense for financial losses incurred by creditors.
A company can enter insolvency if it cannot pay its debts, which may be caused by factors including poor strategic decisions, bad seasons, or cash flow issues. Insolvency can also happen if the business fails to adapt its products or services to meet consumer demands. These factors can lead to a lack of revenue, which in turn leads to higher costs and debts that are not paid.
If the business is not able to repay its debts, the insolvency process can involve a liquidation or CVA. Liquidation involves the sale of the company’s assets and the distribution of proceeds to creditors. Alternatively, a CVA is a debt solution option that allows the company to continue operations by reducing its overheads and reworking its debts. In both situations, the insolvency practitioner will charge fees for their role.
Whether you’re insolvent or not, it’s important to seek professional advice from an Insolvency Practitioner as soon as possible to minimise the impact on your business. An insolvency practitioner can assist you with managing your debts and improving your cash flow. They can also advise you on the various insolvency options available and the best route to take.
insolvency services are provided by RPBs and licensed insolvency practitioners. They are regulated by the Insolvency Service and must comply with their regulatory objectives, which aim to promote best practice, transparency, integrity, and consistency.
A common reason why companies enter insolvency is due to a large debt owed to unsecured creditors, such as banks. This can often be resolved by negotiating a repayment plan with creditors to spread the debt over a period of time. This is usually a more preferable option than going out of business or being forced into liquidation. In some cases, the Insolvency Service may decide to prosecute directors for breaching their duties and regulations, which can result in significant financial recompense being awarded to creditors. An experienced insolvency lawyer can help you defend your interests and prepare a strong response to any Insolvency Service inquiries. They can also guide you through the investigation process to avoid potential sanctions.