Overwhelmed with Debt? What to Look for in an Insolvency Practitioner

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Sometimes in life, things just don’t work out the way we plan. Perhaps you had to close the doors on your business. Maybe health problems led you into more debt than you can possibly repay. If you’re a resident of the UK, you might be looking for an insolvency practitioner, and you might be having to consider the option of an Individual Voluntary Arrangement, or IVA.

If you find yourself in similar trouble in the US, search for consumer credit counseling services. These agencies can help you to obtain some relief from overwhelming debt.

In this article we take a close look at what you should look for in an insolvency practitioner. Additionally, we take a look at some of the commonly asked questions you’ll most likely have along the way.

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Do You Feel Comfortable with Your Insolvency Practitioner?

First and foremost, you should feel completely comfortable with your chosen insolvency advisor. What’s more, you should also feel good about the firm they work for. After all, you’ll be discussing some personal information with them. Therefore, it’s imperative that you feel at ease. You need to be confident that you’ll have a good working relationship going forward.

Remember, an IVA will typically last for a period of five years. Therefore, it’s important that you’re both fully committed to getting the best results. As a matter of fact, both you and your insolvency practitioner need to be confident that you can work together during the entire time.

Furthermore, once approved, you won’t be able to change your advisor throughout the duration of your IVA. Therefore, ask as many questions as you feel necessary before signing on the dotted line and committing yourself.

Do They Charge Upfront Fees?

Never be tempted to work with any firm that asks for upfront fees. Most practitioners will allow you to spread their charges over the duration of your IVA. Such an arrangement should ultimately make the arrangement much more affordable for you. What’s more, if you pay fees upfront and 75% of your creditors refuse to accept your IVA proposal, you could lose your deposit.

What Are Your Options?

Make sure that your insolvency advisor is absolutely clear with you about what you should expect from your IVA (both good and bad!). He or she should also talk you through any other options which might be available. Keep in mind that your choices may change, depending on your personal circumstances. If they only recommend an IVA without discussing other avenues, you might want to look elsewhere. After all, an Individual Voluntary Arrangement isn’t a suitable option for everyone.

Don’t Agree to Something That Won’t Work for You

Once you’ve discussed your financial position with your insolvency advisor, he or she will start to work on your proposal for submission to your creditors. However, your advisor will pass it on to you for approval first.

It’s important to remember never to be tempted to agree to something which you don’t feel is realistic. That’s because, once approved, an Individual Voluntary Arrangement is a legally binding agreement. This means you’ll have to maintain the 60 monthly payments going forward.

If you don’t think this is going to be achievable (for whatever reason) then honesty’s the best policy. Never sign up for something which you don’t think will work. If your IVA fails there can be serious implications. This can include the prospect of your creditors applying to make you bankrupt.

Trust Your Instincts

Always go with your gut feeling when it comes to choosing the right firm and the right insolvency advisor to work with. If there’s anything you’re not quite sure about, don’t be afraid to ask. If something sounds too good to be true, it probably is!

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