Finding the right insolvency practitioner

[AdityaK]

Hi All,

I'm new to the forum, wish I'd found it sooner! Recently, I've had to search for an insolvency practitioner and found the whole experience very daunting and opaque. During my search, I didn't feel I could trust IPs I found online and a lot of people kept saying that I should be very careful of 'cowboys'. So I started from a point of caution which was quite hard to shake off.

Eventually I got a fantastic recommendation but it took so long to get there! Is this an unusual experience? Have I missed a trick here? Would love to know how you all have found the right people for you.

Thanks,
Adi

 

[Gavin Bates]

Adi

Many thanks for your post and I am pleased that you found someone you can trust.

As an IP, I would also like to understand people's experiences, because we have seen some poor examples of advice given. Generally this has been from unqualified people but having reviewed their website I can understand why an unsuspecting director would 'pick up the phone'.

Most of our referrals are from other professionals (accountants, solicitors etc.)

I would suggest if you are in this position get recommendations from people you trust and also look local. People often like at price (which is important) but end up with an IP who is hundreds of miles away.

As above I am interested in people comments.

Regards

Gavin

 

[AdityaK]

Hi Gavin,

Thanks for your insight, that's really interesting. Unfortunately, our accountants weren't able to give us a good recommendation and eventually the link was made through a family network.

Is it very rare for you to get someone contact you 'cold' ?

Thanks,
Adi

 

[Gavin Bates]

Whilst we do get a few via the website I would it is only 5% of the total.

 

[Ian J]

During my search, I didn't feel I could trust IPs I found online and a lot of people kept saying that I should be very careful of 'cowboys'.

Isn't that the same for loads of other industries too though?

I know that more people are likely to be able to recommend a builder than an insolvency practitioner but surely you wouldn't contract a builder to build you an extension that you had discovered online without meeting them face to face first

 

[Chris Ashdown]

I would not know where to find one but would expect that I would contact the largest accountancy company in the town and just ask them for a recommendation as they would only recommend someone reasonable

 

[Gavin Bates]

Hi

Thanks for the comments so far which are really interesting. I have always thought that the insolvency professional is similar, and I am sorry for the reference, to undertakers. Nobody really wants to know an undertaker until to have to use their services and at that stage the stress and emotional are very high and therefore the ability to think properly has gone out of the window.

Perhaps I could ask a question if you were searching online what search phrases would you use and / or what types of information would you be looking for?

Regards

Gavin

 

[Chris Ashdown]

Actually we have in the past had two excellent IP's who used to give fantastic info, One was I think Alan and the other a lady

 

[Gavin Bates]

Alan was a previous director of my firm, who has retired from the practice, and the lady is Lisa, based in the South West.

Regards

Gavin

 

[mhall]

I sympathise with the OP. A few years ago my Brother in Law used an IP in Birmingham when he closed down his fitness studio. He paid him £12,000 up front for what was the simplest of tasks. The IP did little more than produce minutes of meetings that didn't take place, change the registered office address and fill the forms in. He advised the staff to "sort their issues out" themselves, didn't inform the landlords the company was closing and produced a statement of affairs that was obviously cut and pasted from someone else. He entered into a dodgy agreement with the other director (and non share-holder) to sell the assets to him for £700 (he could easily have sold the kit even on ebay for £17,000)

This was/is a large company still trading and making serious money in Birmingham and was recommended by his Bank. Although my Brother in Law walked away personally unscathed (if you discount the £45k he had invested), the other Director opened up again within a month and ran the "new " business into the ground after twelve months, not paying a single bill for the last six months and finally selling all the kit for £12k.

Sadly, when my Brother In Law tried to complain he discovered this was also no easy matter - the "authorising body" merely said they "couldn't get involved" as they said it was a legal matter and advised he take legal action. By this time he was so down he couldn't be bothered to fight anymore.

My advise would be, understand that the IP will look after himself first and will then look to make it as easy as possible for himself. Only then will they begin to look at protecting the creditors, staff or yourself. Meet with a few and only deal with those you feel you have a connection with. Some do genuinely want to help and are "old school" (like those you see offering support on here) but sadly, just like politicians, there are those who see it purely as taking money from the most vulnerable.

 

[STDFR33]

There are dodgy folks in all jobs and professions, from the bar staff that will try and stiff you of your change, to the builder that gets paid in full in advance but doesn't complete the work.

With the internet, it is so much easier to conduct due diligence on someone before engaging their services or purchasing their product.

You probably wouldn't go to an unknown restaurant without checking out the reviews, so you shouldn't do it when it comes to handing over thousands of pounds.

 

[Ian J]

You probably wouldn't go to an unknown restaurant without checking out the reviews, so you shouldn't do it when it comes to handing over thousands of pounds.

If you're referring to mhall he stated that the firm was a large well known Midland firm.

45 years ago there weren't as many insolvency firms as there are now and the market was dominated by one particular firm. I recall having a friendly argument in the pub with the top dog's right hand man after I suggested that all insolvency practitioners were dishonest and he was quite indignant telling me that they were so scrupulously honest that they weren't even allowed to drive in one of their client's company cars.

Half an hour later I spotted him in the pub's car park opening the boot of his car and showing someone a boot full of Ben Sherman shirts which quite co-incidentally was a company that they had recently been appointed Receivers for.

 

[STDFR33]

If you're referring to mhall he stated that the firm was a large well known Midland firm.

45 years ago there weren't as many insolvency firms as there are now and the market was dominated by one particular firm. I recall having a friendly argument in the pub with the top dog's right hand man after I suggested that all insolvency practitioners were dishonest and he was quite indignant telling me that they were so scrupulously honest that they weren't even allowed to drive in one of their client's company cars.

Half an hour later I spotted him in the pub's car park opening the boot of his car and showing someone a boot full of Ben Sherman shirts which quite co-incidentally was a company that they had recently been appointed Receivers for.

Large and well known doesn't mean quality. Large businesses can still have a crap reputation. You should due diligence regardless of the size.

 

[Real Business Rescue]

It's an impossible question to answer but the responses are interesting. Generally I would say someone will to spend time going through matters.

Every insolvency practitioner has a difficult task as they are reliant on the director telling them information. It is amazing how many directors forget large director loan accounts. If you have a DLA you should discuss it would the insolvency practitioner and ask how they should deal with it. If they say don't worry about it it normally means you should worry about it!

 

[Spongebob]

I wouldn't go near an Insolvency Practitioner unless my company had significant assets.

If an IP demands payment upfront or a guarantee that the directors will pay his bill you should walk away. If there are insufficient realisable assets in the company to cover easily the cost of the liquidation then you would be best advised to follow the Spongebob Plan outlined in the sticky at the top of this forum.

Never pay an upfront fee to an Insolvency Practitioner. If they are not confident of recovering their fees from the disposal of the company's assets then they are of no use to you and you will learn a very expensive lesson.

 

[Spongebob]

Another word of warning;

The insolvency business attracts a lot of individuals who in other times would have made a living selling used cars or double glazing. They have little or no training in accountancy or insolvency; they are salesmen whose function is to bring in business to be processed by the back-office staff.

Unfortunately, very often these individuals are the first point of contact a potential "client" will have with the firm. Their sole motivation is to get a sale and to take money off you, and to do this they will often stretch the truth well past breaking point.

Be warned!

 

[STDFR33]

 

[UK Contractor Accountant]

Still to soon!

 

[AdityaK]

Thanks to everyone's input on this. From this discussion and speaking to others (both clients and IPs), it sounds like the general process here is to be referred to by your accountant. In general over 90% of business for IPs comes through these referrals.

It also feels like the safest way to get someone trustworthy who will do a good job.

 

[mhall]

If you're referring to mhall he stated that the firm was a large well known Midland firm.

Not wishing to be pedantic, but "He" is a "She". Is my profile Picture that bad?

 

[mhall]

Still to soon!

I'm intrigued. Apart from the rudeness of rolling your eyes, it does show that you have little knowledge or regard of those in the industry who are, as SpongBob says, nothing more than sales people - either that or you can't bothered.

Whilst I am sure you have the highest standards and only do what is best for your clients, even if that means you miss "the sale", the industry is peppered with chancers, the "governing body" don't really seem to care and clients are spending money they don't need to spend and being taken advantage of.

Whilst some people who bounce companies deserve everything they get, I honestly think the vast majority of people genuinely tried to make a success and got themselves into massive personal debt in an attempt to make sure no-one gets ripped off. To then rip someone off when they are at their most vulnerable is just cruel.

 

[mhall]

Sorry, quoted wrong person, see above !

 

[STDFR33]

I'm intrigued. Apart from the rudeness of rolling your eyes, it does show that you have little knowledge or regard of those in the industry who are, as SpongBob says, nothing more than sales people - either that or you can't bothered.


Whilst I am sure you have the highest standards and only do what is best for your clients, even if that means you miss "the sale", the industry is peppered with chancers, the "governing body" don't really seem to care and clients are spending money they don't need to spend and being taken advantage of.


Whilst some people who bounce companies deserve everything they get, I honestly think the vast majority of people genuinely tried to make a success and got themselves into massive personal debt in an attempt to make sure no-one gets ripped off. To then rip someone off when they are at their most vulnerable is just cruel.

There are dodgy folks in all jobs and professions, from the bar staff that will try and stiff you of your change, to the builder that gets paid in full in advance but doesn't complete the work.


With the internet, it is so much easier to conduct due diligence on someone before engaging their services or purchasing their product.


You probably wouldn't go to an unknown restaurant without checking out the reviews, so you shouldn't do it when it comes to handing over thousands of pounds.

Also, you'll find that I rolled my eyes at SpongeBob, not you.

His post was just bashing the profession (of why I am not a part of - I'm an accountant not an IP). Particularly saying that IP's don't have training, which is just plain b0ll0cks.

 

[mhall]

I know it wasn't directed at me, doesn't make it any less rude. You may not like SpongeBob or anything he stands for but I am afraid he is correct - many IPs employ front facing staff that are sales people. The people behind the scenes may well have the best training money can buy but if they are not "people people" the business will suffer. A ten second search bought up this job for example - and having "an insolvency background" - does not mean proper training: https://www.totaljobs.com/job/busin...lle-job74379021?WT.mc_id=A_RE_IDPPC_MP1_SL_14

 

[STDFR33]

A business advertising a Sales / Business Development Manager wants that person to have sales experience.

You will also find that this legal firm wants their sales staff to have sales experience:
https://www.indeed.co.uk/cmp/Lifeti...5ZYM6zFNF9GzwJrJkA0AbGPk9_VWC-s3k9qo7p-uqDYC8

And this surveying firm also wants their sales staff to have sales experience:
http://www.cvsuk.com/careers/current-vacancies/business-development-executive-Manchester


I'm finding a common theme that businesses, even professional service businesses, want their sales staff to have sales experience.

I'll have good money on them wanting their administration staff to have administration experience, and their secretaries to have secretarial experience too.

Just because they are insolvency practitioners, it doesn't mean that they can't actively market and sell their services by recruiting successful sales and marketing staff.

 

[Mr D]

Good sales staff make the company a lot of money.
Have spoken to solicitors, sales staff, call centre staff and an IP - the best at presenting the information I needed was the sales staff.
They won't have the technical knowledge of the IP or solicitor but can be (and often are) far better at selling the product / service.

 

[Ian J]

Not wishing to be pedantic, but "He" is a "She". Is my profile Picture that bad?

Apologies. I don't think that I even noticed your profile picture

 

[Spongebob]

Of course all companies need good sales staff.

The type of IP practice I am warning people against is that which is completely led by the sales department. I know of IP practices which are owned by salesmen with no insolvency qualifications and which exist purely to churn through as many clients as possible for the greatest possible return. They employ qualified staff to sign everything off but keep them well out of the way in a back office.

They used to be called IVA factories, until everyone realised that IVAs are quite unsuitable other than in very specific circumstances.

 

[mhall]

Oh dear - I should roll my eyes... but SpongeBob makes my point. A company run by Sales People is as bad as a company run by Accountants. They may both be needed but they both also need to be controlled

 

[STDFR33]

 

[Chris Ashdown]

As a matter of interest, what happens if you don't use a IP is it unlawful or can you just cease trading and notify everyone like spongbob suggests

 

[Mr D]

You can do as Spongebob suggests. Whether you should do that is another matter.