Insolvency Practitioner Roles
During an individual voluntary arrangement an insolvency practitioner has to fulfill several roles, all of them changing according to the different stages of the process. There are four important roles an insolvency practitioner has to take up during an IVA: adviser, nominee, chairman and supervisor.
All these roles suppose different types of activities and duties, some of them last only for a short period of time, others will last longer.
It is important to know about the roles an insolvency practitioner has to take up, because in some documents they are mentioned without any further explanation, so they might cause misunderstandings.
The first role of the insolvency practitioner is the adviser. Since this is the first role, this happens right at the beginning of the process. As an adviser, he will listen to your debt issues, and he will explain you all the possible solutions.
Besides an individual voluntary arrangement there are several other methods which help you become deft-free in a relatively short period of time. The adviser must tell you all the options you have, so that you can make a decision based on knowing and understanding all the possibilities.
Depending on your exact situation, the adviser might speak about one of the following options: debt consolidation loan, re-mortgaging your house, debt management methods in case your situation is not very serious yet; filing for bankruptcy if there is really no other possibility and an individual voluntary arrangement if you can afford to repay at least a part of your debts. It is important to take this role seriously, and explain all the possible options, because people have the right to be informed and when it comes to money everyone wants to make the right decision.
If you decide that the best possible solution for your debt issues is an individual voluntary arrangement (or IVA), the insolvency practitioner will become your nominee. As your nominee he will help you create a draft proposal which will be sent to your creditors. Actually, he will create the document himself, but you will have to provide him the data he needs in order to create the proposal. In most of the cases the proposal is a standard document, which will be modified depending on your situation.
The nominee must know a few things about you for the proposal: your exact income and expenses, a written explanation where you detail how you ended up with financial difficulties and a list of your assets (if that is the case). He will then analyze all this data; he might even require some other documentation or information. After proper analysis he will calculate the amount you will have to pay monthly, and if you agree with all the details, he will send the proposal to your creditors along with a notice which invites them to the creditor’s meeting. This is his last act as your nominee.
As a chairman, he has only one thing to do, and that is to hold the creditor’s meeting. During this meeting he will negotiate with your creditors, trying to convince them to accept your proposal. In case the required majority of the creditors will not accept the proposal, the insolvency practitioner will take up the role of the nominee again and he will rewrite the proposal according to the new expectations. In most of the cases creditors will accept the proposal at first, but they might ask for minor modifications, which can be corrected right there. Such a modification is if the creditors ask to include restrictions on your right to obtain credit during the IVA. Such minor modifications can be included in the document right at the meeting, but of course you will be informed about them, whether you are present or not. Being a chairman is such a short role, it lasts only for a few hours at most.
The last role an insolvency practitioner has to take up is the supervisor. This is the only role which lasts very long, in most of the cases it lasts five years, which is the common term of an IVA. During this period the supervisor has to be the link between you and your creditors. After the IVA being accepted, you will not have to talk to your creditors again, you will have only keep in touch with the supervisor, send him the agreed amount on the agreed date of the month, and your job is done.
The supervisor has to make the payments to creditors in the agreed percentage, he will also have to make annual reports and send them to the creditors, to the court and to you. During the term of the IVA, you will have to report the supervisor if your financial situation had changed in any way, or if you cannot comply with the terms of the IVA. The creditors must do the same: if they have any issue, they will have to contact the supervisor, who will notice you and together you will find a way to solve the new issue.
These are the roles taken up by an insolvency practitioner during an IVA. All these roles are very different, but equally important. The most important thing is that only a licensed insolvency practitioner is allowed to administer an IVA, so pay attention when you choose the person who will take care of your debt issues.
After all you would like to become debt-free and not to lose more money. It is equally important to be in good relations with the insolvency practitioner, since you must ask him to explain whenever you do not understand something related to your IVA, and because you will have to work together for a period of five years, until the end of the arrangement.