What Does An Insolvency Solicitor Do?
When a company becomes insolvent and consequently is unable to pay its debts, an insolvency practitioner will be appointed to lead the process of recovering or liquidating the business. The insolvency practitioner is essential to the process and will organise the liquidation of assets, and their distribution to shareholders, or the implementation of a recovery strategy.
However, they won’t be the only professionals involved. In many cases, an insolvency solicitor may also be instructed to provide legal representation and advice for companies facing legal action, or for creditors/debtors involved in a dispute. An insolvency solicitor is an expert in insolvency law, and is able to offer legal advice to all parties involved in the process, from both a debtor and creditors’ perspective.
What Do Insolvency Lawyers Do?
An insolvency solicitor may be instructed to resolve issues that have arisen as a result of a business becoming insolvent. What exactly these issues may include, will depend on the individual circumstances of the company. However, in more complex circumstances, difficulties that require the instruction of a solicitor, may include fraudulent business activity, director misconduct or mass redundancies. The role of an insolvency solicitor within the process could involve the following:
- Providing advice to creditors regarding disputes in the insolvency process
- Advising directors that are facing threats of disqualification or claims of misfeasance
- Advising on any legal action being taken against an insolvent company
- Advising on the re-use of company names
What Does An Insolvency Practitioner Do?
Insolvency solicitors and practitioners will often communicate on certain issues, however their roles are distinct. An insolvency practitioner is responsible for the following duties:
- Acting as administrator, liquidator or supervisor based on the insolvency procedure at hand
- Advising insolvent companies on the best course of action
- Negotiating with creditors and other parties involved
- Investigating directors’ actions leading up to, and including the period in which the company is insolvent
An insolvency solicitor on the other hand, advises on any legal complexities that may arise within this process.
Should I Speak To An Insolvency Solicitor Or Practitioner?
As you can imagine, the fields of an insolvency solicitor and practitioner will often overlap, and in many cases, both will be involved in proceedings, alongside other professional advisors. If your company is insolvent, your first port of call should be to contact an insolvency practitioner as soon as possible. They will advise you on the best course of action for alleviating the debts or recovering the company, as well as advising on which parts of the process may require legal instruction.
If you have concerns that your company is becoming insolvent, or is already overwhelmed with debt, please don’t hesitate to get in touch with My Liquidation’s experienced team of insolvency practitioners. By discussing your company’s individual circumstances, we can provide tailored, confidential advice on the best steps for moving forward.
