Insolvency practitioners are officers who are authorised by specific regulatory bodies to take on cases of insolvency across the UK. Insolvency practitioners are highly qualified professionals, and must have passed the exams offered by the JIEB (Joint Insolvency Examination Board) in order to display sufficient technical knowledge.
In addition to these exams, to gain an insolvency license, individuals must have gained sufficient experience in the field, and have been recommended by other insolvency practitioners.
Insolvency practitioners are required in a wide variety of situations, and those situations will almost always be stressful with high consequences.
It’s important to make sure that you have at least a limited understanding of the role of an insolvency practitioner when you’re choosing one, to make sure that you can make an informed decision.
What is it that insolvency practitioners do?
When bad debts occur in a partnership, company or individual, insolvency practitioners are there to intervene and sort out the oftentimes complex financial situation.
Their key purpose is to minimise any of the potential negative ramifications of bad debts, ensuring that all assets are divided in the most legally appropriate manner possible.
To do this, insolvency practitioners interpret legal agreements and other legislation to the best of their ability, while at the same time acting as arbitrators between the different parties. These parties are generally companies, private individuals, creditors, and stakeholders.
How much do insolvency practitioners charge?
Insolvency practitioner fees are highly variable, and will depend on several different things. While each insolvency practitioner will have different individual rates, all practitioners will base their fees on two different structures – hourly work and fixed fee work. Initial advisory work that’s likely to be quite contained will generally be carried out on a fixed fee, as there normally isn’t much capacity for it to significantly increase.
Any additional work beyond this initial consultation tends to be charged on an hourly basis, so that it best reflects how much work is actually carried out.
Choosing an appropriate insolvency practitioner
The first thing to check when choosing an insolvency practitioner is that they’re properly qualified and hold an insolvency practitioner license. Generally, the best way to do this is by going through an established firm such as Chamberlain & Co.
Once you’ve established that they’re technically competent, it’s also important to make sure that they’re personable and that you get along with each other. They’ll be acting as arbitrators in an often stressful situation, so you want to make sure that you see eye-to-eye and can trust them.
To find out about this, look at reviews and testimonials to see what prior clients say about their service. You can also ask for an initial assessment session, to judge them in person.
In this session, they’ll set out their fees in an engagement letter and do their best to estimate how much work will need to be done in your specific case.
