Insolvency Practitioners

The role of an Insolvency Practitioner

An insolvency practitioner will work with you to try and turn your business around. There first task will be to help produce an Individual Voluntary Agreement. This is a legally binding agreement between you and your creditors. The agreement allows you to make reduced payments to your creditors until your debt is paid off in full.

Your creditors get to vote for or against the agreement, but you only need one creditor to vote for it for it to be approved. However if one of your creditors forms more than 25% of your debt and they vote against it then the agreement will be declined.

The insolvency practitioner will work with you for the duration of the payment term to ensure that your business and financial position are stable and that you are making the agreed payments. You make the payments to the insolvency practitioner and they then distribute the money to your creditors in accordance with the agreement.

At the end of the payment period, once all payments have been made, then the outstanding balance will be written off, this will signal that you are solvent again.

Whilst you made contact with the insolvency practitioner to initiate the process, they will work for you whilst drawing up the agreement, however once it is drawn up they will work on behalf of the creditors until the debts are paid. There role is to agree the payment terms and make sure you stick to them.