The role of the Insolvency Practitioner
If you're exploring the IVA option, you'll no doubt see reference to someone called an 'Insolvency Practitioner' appearing throughout the IVA process.
So, here is a brief explanation of the role an Insolvency Practitioner plays within the IVA process.
What Is An Insolvency Practitioner
An Insolvency Practitioner, often referred to as an IP, is usually an accountant or solicitor qualified to provide insolvency services.
An IP must qualify through a stringent set of accountancy and insolvency exams in order to obtain a licensed before they are allowed to take appointments.
There are two different areas of insolvency in which an IP might practice. There's corporate insolvency, which deals with company debt problems and personal insolvency, which IVAs and bankruptcy fall under.
Using an IP is a legal requirement
Under the 1986 Insolvency Act, an IVA can only be administered by a licensed IP so, for this reason, anyone wishing to enter an IVA can only do so by using the services of an IP.
There are basically two stages to the IVA process.
After it has been established that the IVA applicant qualifies, the IP will begin work on their behalf, by acting as their IVA Nominee.
All the relevant paperwork and supporting information will be gathered together so the IVA proposal can be drafted.
The proposal is the IVA's legal document, similar to a contract, which outlines the applicant's offer to their creditors.
Once drafted and verified by the applicant, the IP provides copies of their proposal to their creditors and arranges the Creditors' Meeting.
It's during the Creditors' Meeting that a decision will be made by creditors as to whether the IVA will be accepted and thus become legally binding.
Chairperson of the Creditors' Meeting
As chairperson of the Creditors' Meeting, the IP is responsible for ensuring that all votes cast are counted correctly and, thus, for determining whether the IVA has been accepted by the sufficient majority of creditors.
They have the power to adjourn a Creditors' Meeting if they feel doing so is in the best interests of all parties, particularly when agreement can't initially be reached. An adjournment will give extra time for the parties to negotiate an agreement.
Once an agreement has been reached, the IVA becomes legally binding on all parties and IP's role changes again.
After the successful outcome to the Creditors' Meeting, the IP takes on the role of IVA Supervisor.
Until this point, the IP's been representing the applicant, working as their IVA Nominee.
From this point on the IP's role changes to that more of an intermediary. Their main task now is to ensure that the terms and conditions of the IVA are adhered to.
For the duration of the IVA, the IP is responsible for ensuring that the IVA client complies with their IVA obligations, ensuring that the interests of the creditors are protected.
They will ensure that the annual reviews are undertaken to monitor the IVA client's circumstances and to ensure that their payments remain affordable.
As Supervisor, the IP's also responsible for collecting and distributing the funds being paid into the arrangement.
Experiencing IP Problems
Occasionally, people will experience a breakdown in relations with their IP and, whilst thankfully, this is still an unusual event, it does happen from time to time.
Obviously, the main objective for all parties is to keep the IVA on track, but if there's a disagreement between the IP and their client, problems can occur.
In situations where the IP's decision on a given issue seems to contradict the client's understanding of their proposal, it is possible to raise an objection.
First action should be to write to your IP, explaining the grievance.
If further action is required, a formal complaint can be made through the Insolvency Service's complaints gateway.
IPs are heavily regulated individuals and most will take the prospect of a formal complaint very seriously.
Changing your IP
Unfortunately, it's not a simple process to change your IP just because you decide you want to.
Replacing your IP would only normally be done as a result of an intervention from their regulator, which wouldn't happen without very good reason.
However, it is pretty common for an IP to change as a result of other factors. IVA providers do change hands from time to time and, as part of that process, the IP would normally change too.
Unfortunately, whilst the thought of your IVA being acquired by another company can be quite a distressing, there's not much you can do to stop it.
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