Here in England and Wales, insolvency practitioners, often abbreviated to IPs, take control of insolvency cases for both limited companies and individuals. Generally speaking, insolvency practitioners are accountants who have chosen to specialise in insolvency and they must be licensed to carry out their work. Usually, they will be licensed and regulated by the same professional body with which they qualified as an accountant.
Insolvency in the North West region
In Manchester insolvency practitioners often work right across the north west of England dealing with a rich and diverse workload of cases. Some specialise in personal insolvency whilst others tend to focus on insolvent company cases. As Manchester has become something of a northern hub for insolvency work, Insolvency practitioners Manchester are frequently appointed to cases in Liverpool, Wirral, Wigan, Widnes and further afield into Lancashire and the southern reaches of Yorkshire. Don’t be surprised to find your insolvency practitioner is from Manchester if you live in any of those areas.
What is the difference between bankruptcy and insolvency?
There is often some confusion as to the difference between bankruptcy and insolvency. In other countries, particularly the USA the term bankruptcy and insolvency are interchangeable and mean the same thing. In England and Wales the two terms have rather different meanings. Bankruptcy applies only to individuals, not limited companies, whilst the term insolvency is a very broad umbrella term covering individuals and limited companies.
What are the different types of cases, insolvency practitioners deal with?
If an IP is dealing with someone who is personally insolvent, he may be acting as a trustee in bankruptcy if the person has been made bankrupt or as a supervisor if the person has avoided bankruptcy by entering into an Individual Voluntary Arrangement (IVA). The Greater Manchester area is home to many specialist IVA firms who do nothing other than individual voluntary arrangements and debt management work.
Where an IP is dealing with an insolvent company it might be as liquidator in a creditors’ voluntary liquidation (cvl) or as an administrator in a pre-pack administration or as a supervisor in a company voluntary arrangement. Alternatively, he may have been appointed receiver of a company by the company’s bankers.
Do insolvency practitioners only close down companies and make employees redundant?
It is fair to say that many people see the role of the insolvency practitioner in a very dim light indeed. The reputation of IPs is therefore not so great in a lot of people’s eyes. It needs to be said though that whilst being insolvent may well end up in bankruptcy or liquidation, Manchester insolvency practitioners are very keen to turn around the ailing condition of businesses and at the same time preserve the jobs of the employees. IPs generally enjoy good relationships with creditors, including HMRC, and work hard to implement debt repayment agreements agreeable to the creditor and affordable to the struggling business. In other situations an insolvency practitioner may oversee the sale of a business so that it benefits from the expertise of new owners, perhaps with new investment as well.