The role of the Insolvency Practitioner
If you're exploring the IVA option as a solution to your debt problems, you'll no doubt see reference to someone called an 'Insolvency Practitioner' appearing at all stages of 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 usually practice. There's corporate insolvency, dealing with company debt problems and personal insolvency, which deals with IVAs and bankruptcy.
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 using the services of an IP.
There are basically two stages to the IVA process.
There's the initial stages of the application, where the IP undertakes the role of the IVA Nominee, followed by the second stage, where the IP undertakes the role of the IVA Supervisor.
IVA Nominee
After it has been established that the IVA applicant qualifies, the IP will begin work on their behalf, acting as the IVA Nominee.
All the relevant paperwork and supporting information will be gathered together so the IVA proposal can be drafted.
The proposal is the 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 to the 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 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.
But, once a agreement has been reached the IVA becomes legally binding on all parties and IP's role changes again.
IVA Supervisor
After the successful outcome to the Creditors' Meeting, the IP takes on the role of IVA Supervisor, at which time a subtle shift in the relationship with the IVA applicant will be noticed.
Up until this point, the IP's been representing the applicant and working on their behalf in preparing the IVA as their IVA Nominee.
From this point on the IP becomes the administrator of the IVA acting, in most part, in the interests of the creditors. Their main task now is to ensure that the terms and conditions of the IVA are adhered to, as has been agreed by the applicant in the proposal.
For the duration of the IVA, they're responsible for conducting the annual re-assessments of the applicant's financial circumstances, to ensure the IVA is on target.
As Supervisor, the IP's also responsible for the collection of IVA contributions from the applicant and, in turn, the disbursements, payable to creditors.
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 the applicant as to what action must be taken to comply with the terms of the IVA, problems can occur.
In situations of stalemate, or where the IP's decision on a given issue seems to contradict the terms agreed in the IVA, it is possible to raise an objection.
First action should be to write to your IP, explaining your grievance. If that fails to bring about a successful resolution, then the next step would be to write to the IP's regulatory body.
IPs are heavily regulated and take the threat of action against them extremely seriously. As a result, a solution will often be found before the regulator needs to be informed.
However, just because an applicant feels the IP is in the wrong, doesn't make it so. So it's worth reading your proposal through before you take issue with how the IVA terms are being administered.
In the vast majority of cases the IP will be vindicated as having been correct in their interpretation of the law.
Changing your IP
Unfortunately, it's not a simple process to change your IP if you're experiencing communication problems. Replacing your IP would only normally be as a result of the interjection of the regulator.
However, it is pretty common for your IP to change as a result of a commercial exchange. IVA companies do change hands from time to time and, as part of the process, your IP would normally change too.
Whilst the thought of your IVA case being acquired by another company can be quite a distressing thought to some people, there's nothing that can be done to stop it so, it's best to simply focus on the IVA and remain compliant with your supervisor as needed.
Professional IVA advice
If you have any IVA related questions you'd like to ask, simply call 0800 088 7502. Or, should you prefer that one of our IVA specialists call you, just complete this form and we'll call you back at your preferred time.
