Home Finance Why Should You Seek the Services of an Insolvency Practitioner?

Why Should You Seek the Services of an Insolvency Practitioner?

There is a common belief that one only needs the insolvency practitioners (IPs) only when a company is insolvent but this is not accurate. There are many roles that the IP can conduct and this includes advice to directors even when the company is solvent but they need to run the fortunes and trade profitably once more.

When a business is threatened by legal action by creditors or when there are some temporary cash flow issues, then you should get professional advice and this can actually turn things for the better for the company. It is important that you work as quickly as possible so as to avert any bad issues in the long term. In the circumstances, you shouldn’t delay because when you act as soon as you notice something is off, there are so many options that will open up and they may include:

  • Voluntary liquidation
  • Sale of assets so as to direct more cash to the business
  • Restructuring of the company
  • The sale of business

If a company had been trading in a profitable manner previously and if the business is sound fundamentally, a licensed IP can offer the best chances of survival. The financial issues that you may be dealing with could be really simple like unexpected bills, or maybe you have lost a customer who has just gone bankrupt or a market down run. This can affect trade and you may not pay suppliers as expected. An IP can advise a company or individual experiencing difficult times. They can identify and then present you with all the options that can help you restructure and recover. They pay attention to the business goals that you may have.

Help in practical terms

The IP is able to negotiate with the creditors for the client. They will offer all the options and then recommend a course of action that is best for the company or business in the circumstance.

The practitioner also engages creditors in the negotiations carried out professionally and instills some level of confidence in the long term liability of the company to settle all bills. The creditors will most likely trust and respect judgment of a person who is a professional. Specialist knowledge is always appreciated.

When you have a professional negotiating for you or your company, then you can be sure that you are in good hand and it might actually be the only thing needed to come out successful.

It is an investment

Having an IP who is licensed and qualified is the best investment for the future of your company. Without such guidance, directors can face issues that have to do with personal liability for the debt of the company, wrongful trading accusations and the closure of the business. An IP looks at business operations with great detail so as to find a solution early enough. An IP makes certain that the most appropriate route is taken and then works at maximizing the interest of the creditors without neglecting the business interests either.

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