Insolvency practitioners - or IPs -
are not the big bad guys that many people in the media make them out to be. As a matter of fact, they are considerate just like the people they try to help and while most people may not believe that they understand the pressures of being in debt and how it affects people and their daily lives, they really do. And if you own your own business that is unable to keep up with the debt that it has incurred, an insolvency practitioner could very easily become your new best friend.
An IP is a professional
who is qualified and authorised to advise you and act as a liquidator, administrator, or trustee in debt management cases such as IVAs and bankruptcies. They know how to deal with businesses that are in financial difficulties, and they have the expertise and experience to guide you with the right professional advice to help you and your company. They are closely regulated by a number of regulatory bodies in the United Kingdom, and some IPs will only deal with the larger corporations. Small business owners should look for an IP that specialises in small business concerns such as sole traders, partnerships, and limited company interests.
Small businesses such as sole traders,
partnerships and limited company interests are going to be hit the worst in the recession that is sweeping the United Kingdom. IPs can help them out, especially if they find themselves suddenly dealing with the following warning signs of trouble:
How your IP deals with the problems of your business
- Unable to pay the monthly PAYE or quarterly VAT or both
- Cheques are being returned by the bank
- Cash flow is a problem
- Recognising there are problems with the business but looking for a way to trade out of it instead
- Pressure from creditors in the form of letters, judgements, bailiffs or winding-up petitions and spending more time dealing with them than building the business
- Financial information is not accurate or up to date
- Borrowing from relatives, friends, and other business acquaintances or remortgaging your home to gain money to run the business
- Anxiety attacks, sleepless nights, and excessive habits forming
all depends on how your business is set up in the first place. If you are operating as a sole trader, all of your liabilities are your own and you cannot avoid them, meaning that you could - at the worst - have to file personal bankruptcy. If you have a viable business or assets, your IP may be able to help you set up an IVA with your creditors and you’ll be able to save your business. If you are part of a partnership, once again the debts are yours and yours alone although you may be able to apply for a partnership voluntary arrangement (PVA). With a PVA the partners may not have to contribute any of their personal assets.
How you deal with business debts will be based on how the business is structured, and this is where an IP comes in handy. They will be able to advise you on the best course of action for you and your business. Most IPs will offer you a consultation free of charge so you can handle your debt right away and salvage your business. They really are not the bad guys they are made out to be. They might actually turn out to be your salvation.