An IP must hold a licence and have:
- passed the insolvency examinations (JIEB exams);
- gained experience in insolvency work; and
- satisfied an authorising organisation (also known as regulator) that they are fit and proper to act as an IP.
IPs must follow the law and their work is monitored by regulators to make sure that they do. ICAEW is the largest single regulator of IPs in the UK. We monitor our licence holders to make sure they continue to be fit to carry out insolvency work.
What does an IP's job involve?
IPs are appointed to sort out difficult situations. In some cases, their main task is to try to rescue a business.
If it is not possible, the IP aims to:
- sell the assets of the person or company who owes money;
- collect money due to the person or company;
- agree creditors’ claims; and
- distribute the money collected after paying costs.
The IP’s work involves dealing with many competing interests, but usually their main duty is to look after the interests of creditors. Although creditors can give details of their claims, IPs will not agree the claims until they are sure that funds will be available.
In some cases, the IP will give advice to a debtor immediately before a formal insolvency process begins.
The ICAEW Certificate in Insolvency provides a practical introduction to the work of an insolvency practitioner.
How can I complain about an IP?
Before making a complaint about an IP, you should make direct contact with the IP. Concerns often arise as a result of misunderstandings about the IP's role and it's always best to try to raise these with the IP in person.
An ICAEW licensed IP 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.
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.
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.
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.
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.
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).