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The first action to take is to contact someone who can help. Often that will be an Insolvency Practitioner (IP).
When it comes to choosing someone to help you if you are facing insolvency, there is a one basic question to be answered first. It is simple, straightforward, and should only produce one answer.
The question is this:
‘Are they qualified as an Insolvency Practitioner?’
However, people don’t always ask or check. Perhaps this is because Insolvency Practitioners are recognised as being trained professionals. By which I mean that people may assume anyone offering insolvency services is, by default, qualified to do so. They perhaps assume competence in much the same way we would automatically assume someone offering legal advice was a qualified lawyer, or the person approaching you in the mask and wielding the drill, is actually a dentist.
Sadly this assumption about insolvency advice may not always be correct, and a recent court action by The Insolvency Service demonstrates how easy it is to appear legitimate.
Manchester based company, Save Consultants Ltd, found themselves in court and eventually shut down because they were offering insolvency services without the appropriate licence. Their website offered a range of options including, 48-hour sale of companies, debt restructuring, crisis management, and creditor negotiations. They also claimed to have helped hundreds of companies and that they offered an alternative to formal insolvency. However, as no current or former directors of the company were licenced IPs, the court decided that they were offering insolvency services without the authority to do so. So, they were closed for undermining the integrity of the insolvency regime and refusing to explain their business practices.
To quote the Insolvency Service directly on what that means:
Insolvency work such as acting as a liquidator or an administrator for a company is regulated and can only be done by a licensed insolvency practitioner.
Individuals must pass the Joint Insolvency Examinations Board exams to qualify as a licensed insolvency practitioner. They must also meet certain requirements set out by the regulatory bodies, which include evidence of insolvency experience, fitness and propriety together with one or more references.
This case is a perfect example of why you need to check who you are dealing with. Save Consultants Ltd were not qualified to help the businesspeople that used their services. It is reasonable to assume that their clients were directors and individuals who were in a serious financial position. People with families, lives, and probably employees, who were unwittingly handing their future financial stability to unqualified individuals, promoting services and promises they had no right to offer.
As you can probably tell, I don’t have much sympathy for anyone who is not a qualified IP offering an insolvency service. Don’t misunderstand me, there are a lot of very useful sources of advice on both keeping your business going in difficult times (including our survival guides) and what to do if that isn’t possible. When you reach the point where you need to talk to an Insolvency Practitioner though, you are in real need of professional, qualified help. That means you need to speak to a licenced Insolvency Practitioner.
When we started Smart Business Recovery, we naturally set out to provide the most efficient and professional service we could when it came to company insolvency, other services such as members voluntary liquidations, and helping individuals in personal difficulties. In the end, knowledge, training, qualifications, professional standing, continuing professional development and the ability to process your insolvency to the highest standard, are reasonable minimum expectations, aren’t they?
On the subject of helping, for the team here at Smart Business Recovery at least, helping people is high on the list of reasons we do what we do. Insolvency should not just be about process and legalities; it should also be about people.
We had a ‘thank you’ card the other day. It was from someone who we had helped when they needed advice and guidance, and it meant something very important to us. Here’s why.
When you are in the insolvency world, you inevitably spend a lot of time dealing with people who are in very difficult, unpleasant, often emotional, and certainly unwanted, situations. Financial difficulties are stressful and unpleasant whether personal or through your business. Constant requests for money from your creditors, concerns about your staff, worries about how this will affect you, your future and, often the worst fear, your family, all put intense pressure on you. That needs to be recognised.
We think that people who are being affected by their financial issues deserve a little more as well. They deserve respect and empathy for what they are facing. It is hard to go through a financial problem and our job is not just to get you to the other side, it is to get you there by guiding you down the right route for you. We talk you through your options and then together, we choose how we proceed. Some things are written in stone, after all the law is the law and the insolvency practice is there for a good reason. The way you are treated is up to us and we don’t believe that adhering to the required practice means being a soulless, robot.
The card we received was frankly lovely. It said how grateful they were for our help, it thanked us for all our guidance and said we had been of service when they didn’t know where else to turn. Most importantly it had one small phrase in there that summed up what we said were our core values when we started Smart Business Recovery. The sentence was:
‘…you have made me remember that there are some very decent folk out there’
That small comment matters because it means we are more than just professional. It means we are more than highly competent. It means we are doing more than hitting the mark for a licenced professional.
It means that we are being there for the people who need our help and we are still, after all these years, remembering that human beings are at the heart of financial problems.
If your business is struggling financially, please take a look at the advice on our website and your first appointment is free. We hope you don’t need us for personal bankruptcy or business insolvency, but we are here if you do.
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