The Insolvency Service Updates
The conduct of some individuals is staggering and can result in criminal convictions.
It is worth checking the updates to see what rogues and the reckless can do which ultimately ends up with other individuals and businesses having to write off monies owed. The sums involved are often considerable and can identify creditors being owed life changing sums of money.
The Role of the Insolvency Service
The Insolvency Service will consider the conduct and affairs of individuals who become bankrupt and directors and owners of companies that enter liquidation.
Usually, if the Insolvency Service takes further action it will be because of the report of the insolvency practitioner appointed over the individual or company’s affairs.
The insolvency practitioner usually starts off as the Official Receiver which is a government body. However, sometimes a private insolvency practitioner will be appointed in place of the Official Receiver, if there are sufficient funds in the insolvent estate and if the affairs are more complex.
Dealing With Assets, Money and Liabilities
The main role of the insolvency practitioner is to identify what assets the individual or company has, get the money in and then distribute to creditors. Sometimes there is no money to distribute at all.
Powers to Reverse Transactions and to Take Action Against Directors
As well as dealing with the finances, it must also consider the conduct of the individual or individuals in control of a company. The insolvency practitioner has powers to apply to court to reverse certain transactions such as gifts and preference payments to certain creditors, to ensure all money that should be available is, and so that all creditors are dealt with fairly and evenly.
A private insolvency practitioner must also prepare a report to the Insolvency Service to identify any concerns or irregularities in the affairs or conduct of the individual or individuals in control of a company. Action can involve disqualifying someone from being a director of a company. Sometimes it can also result in criminal convictions, as you will see from the government website.
Due Diligence on Your Customers and Suppliers
Knowing who you are doing business with is a crucial part of credit control. Extending credit to a business or individual that cannot afford to pay can leave you very out of pocket.
The main thing to take away, is to make sure you exercise caution about providing credit and make sure you check who you are giving credit to. The insolvency register and companies house are an excellent starting place to check with there are any warning signs or existing insolvency records against a company or individual.