Career as an insolvency practitioner

[liverpool1981]

Hi
Can anyone please guide me on this. I would like to become an insolvency Practitioner. I dont have a degree but i have banking experience. I am 45 is it too late??. I seen online that you need 600 hours working in an office of an ip. In this current market would an office take you on say on a voluntary basis until i was fit to pass the exam. Any help would be greatly appreciated

I've been working as an Insolvency Practitioner or IP since about 1988. I started as a Trainee Chartered Accountant who went on secondment to the insolvency team and never went back to audit. A lot of IPs have travelled that way, but there are many others working in insolvency without having a formal accountancy qualification. To actually take appointments as a Liquidator, Administrator, Trustee in Bankruptcy etc, you need to pass a series of pretty tough exams as well as spend quite a long period of time in practice. The exams cover all aspects of practice so you would need to ensure that the work you were doing covered all aspects of insolvency work. Generally I would say that a period of 5-7 years experience would be needed to make sure you had enough practical experience before thinking of sitting the exams. The exams look at a whole series of practical scenarios as well as testing knowledge and application of the law and ethical guidelines. However it is perfectly possible to have a satisfying career in insolvency without sitting the exams. Most firms will offer a package to an employee with relevant experience to include sitting the exams and all the training necessary.

With a banking background you could well be an attractive candidate for a firm. Age shouldn't come into it, although I will say that most of more junior members of the team will tend to be recent graduates or school leavers. But with a banking background it would be worth talking to a firm as you should have some decent banking contacts which could well to useful to a firm. We wouldn't take people on on a voluntary basis - it would always be a paid position.

A lot of initial work will involve learning about insolvency processes 'on the job' and may be seen as basic and process driven. It can be a very stressful job - basically you are the ones who will give bad news to virtually everyone you meet. If you are dealing with a close down then you will be dealing with very stressed directors and employees, most of whom will be losing their jobs/ livelihoods etc, as well as also having to talk to creditors etc who are facing loosing what may be significant sums of money which may also lead to the collapse of their own businesses. But it can also be a highly rewarding career and can involve working in a great team and managing to preserve jobs and employment going forward. IPs deal with lots of different types of businesses and meet people from all areas and backgrounds from factory workers to MPs. We are highly regulated and there are specific procedures and rules that have to be followed at all times. We work hard but also enjoy a pretty well paid and rewarding career. For more details on the career paths and types of work we do it may be worth looking on the website of our 'trade body' R3. There are guides to the type of work we do and I think there is assistance for students etc. Insolvency is not a career to everyone's tastes but for a lot of people it offers a great variety of challenges and chances to try and help others in what is probably a time of extreme stress. Good luck if you decide to go for it!

Thank you so much for all your help
Merry Christmas

@Yorkshireinlondon We are thinking of doing an MVL, is it true that the only cost (aside from the insolvency practitioners costs) is 10%
And what sort of costs are reasonable? I heard it could cost thousands, but an internet search has thrown up many companies who seem to do it much cheaper and some of them look quite legitimate.
What sort of things should one look out for / what could go wrong with a bad insolvency practitioner?

Feline - there's no standard cost for an MVL. It will depend on exactly what needs to be undertaken. MVLs can be very complex tax driven matters - for which we will work alongside specialist tax teams - or may be the final distribution of a small cash balance remaining in a company after all assets have been liquidated and creditors paid. Or they can be somewhere in between. In many ways they can be one of the most challenging and technical aspects of insolvency practice and one where litigation can arise very easily. Despite the Company being solvent the liquidation has to be undertaken by an Insolvency Practitioner- but the fact of solvency does mean that the negative aspects of the Insolvency Legislation are not invoked.

You ask what can go wrong. Quite a few things come to mind but the main one is probably that despite a Declaration of Solvency being sworn the Company is not actually solvent and unexpected creditors or claims arise. Swearing a declaration which is knowingly false is a criminal offence. This does not arise very often but what is needed is that a proper review is undertaken pre liquidation in order to determine that the solvent process is the correct process. Other issues may arise if it takes longer to realise assets than then 12 month period provided for in the legislation. The Declaration provides that all debts will be paid in full with statutory interest within a maximum period of 12 months. In the current climate it may take longer to realise assets- or asset values achieved may be insufficient. Additionally tax affairs do need to be considered carefully as it is necessary to close off HMRC matters properly in the liquidation.

You will find ads online offering MVLs for very low costs but it's highly likely that once an IP has looked properly at what is needed to be done the real cost will be significantly higher so the low cost may be seen as way to entice a director in and obtain a commitment which it might be difficult to back out from. I would advise exercising caution when considering such offers and I personally would never give a quote until I have looked at exactly what position the company is in and what is needed and give my advice accordingly. But not all IPs are me!

Basic costs for all MVLs include statutory advertising and a Bond which has to be paid in all matters basically as an insurance policy against an IP running off with the cash. The cost of the Bond depends on the level of assets to be dealt with in the case. 10% of assets as a fee would be misleading in my opinion - I have dealt with MVLs involving many multi millions of £s and while that would be nice fee to earn it would be very hard to justify! Costs can be agreed on a fixed fee basis - good for certainty of outcome - or on actual time costs arising , or on a percentage of assets to be dealt with. There is no fixed way and it is a matter that is negotiated between an IP and the client at the beginning of the case. Send me a PM if you want to explore further - I'd need to know what was on the current Balance Sheet, Creditor levels, tax position as a bare minimum, and I'll be hopefully be able to advise on whether your IP is going in a reasonable direction or not.