The Role Of The Insolvency Practitioner In Bankruptcy
When a company or individual declares themselves bankrupt
, they will require the services of an insolvency practitioner in order for the process to be completed properly. In order to offer services for companies and individuals facing bankruptcy, an insolvency practitioner must be qualified.
During the bankruptcy process, the insolvency practitioner will become an Official Receiver. The Official Receiver will take control of the bankruptcy and assess everything that the company or individual owns. Individuals who go bankrupt usually end up losing their home, but are able to keep personal items such as clothes and a car of transport is needed for work.
The Official Receiver will ensure that the company or individual adheres to the rules that need to be followed during the bankruptcy procedure. It is important that regular contact is kept with the Official Receiver, who will decide how much any creditors need to be paid. For those who do have assets, the insolvency practitioner will act as a trustee in the role of the Official Receiver and will ensure that all payments are made.
Since bankruptcy can be a stressful procedure, some companies or individuals may wish to opt for an alternative route. One of the main alternatives is an Individual Voluntary Arrangement. This is where individuals will make a formal agreement with creditors on when payments will be made. For this procedure, an insolvency practitioner will also be required. The insolvency practitioner will make sure that the process is running smoothly and that the individual and the creditor are following the arrangement as they should be. Meetings with creditors will be held and the insolvency practitioner will ensure any agreements or rules are being followed.
Insolvency practitioners can also offer advice to companies or individuals that are considering declaring themselves bankrupt. By choosing the right insolvency practitioner, there may be a way to avoid bankruptcy.