An ICAEW licensed insolvency practitioner is able to advise on, and undertake appointments in, all formal insolvency procedures including, liquidations, company voluntary arrangement, administration, receiverships, bankruptcy and individual voluntary arrangements.
Bankruptcy
Personal insolvency proceedings after a petition to the court. This happens when people are not able to pay their debts. It takes away most of their property (for example, their house and other valuable belongings) and the money collected from selling these is then shared among the people they owe money to (their creditors). As a result of bankruptcy, someone who has been made bankrupt (the debtor) cannot act as a company director and, if they trade as an individual, they must trade in their own name. An IP may act as a the trustee in the bankruptcy.
Liquidation
A procedure where the assets (for example, the buildings, equipment and vehicles) of a company are collected by the IP (acting as a liquidator), sold and the money is used to pay creditors, in a specific order. The courts may make an order for liquidation (sometimes called 'winding up') or the directors of the company may decide to put the company into liquidation.
Voluntary arrangement
A procedure that allows someone who owes money to enter into an arrangement with creditors to repay all, or a percentage of, the debts. The IP (acting as a supervisor) makes sure the agreed terms of the arrangement are met. Companies can also enter into voluntary arrangements.
Administration
A procedure that allows an IP (acting as the administrator) to try to rescue a company or sell its assets to repay all the creditors as much as possible of what they are owed.
Receivership
A procedure to recover money lent to a business and put the business into the hands of an IP (acting as either a receiver or an administrative receiver) for a 'secured creditor' (such as a bank).
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