The insolvency trade body R3 has published a new guidance document on the subject of how best to deal with the prospect of personal insolvency as a UK individual.
As experts in both personal and corporate insolvency, we at Begbies Traynor welcome the guidance, which is particularly clear in its assertion that those struggling with debts should only rely on the advice of fully licensed insolvency practitioners.
R3 is keen to emphasise to anyone looking for help with their personal debts that unlicensed advisers are not an appropriate port of call.
Indeed, the association has explained that unlicensed debt advisers often only serve to make matters worse for individuals who are struggling under the weight of debt. Their suggestion is that to take advice from unlicensed advisors is to run the risk of being charged for services which do not lead to positive outcomes and which can subsequently make it more difficult to reach workable repayment arrangements with creditors.
That scenario is certainly one which we at Begbies Traynor recognise and it’s understandable that someone losing control of their personal finances might be eager to listen to unlicensed advisers who claim that there are simple and painless solutions to serious and deep-rooted debt problems.
Unfortunately, the reality is that when individuals become unable to keep pace with creditor demands, the situation cannot be ignored or avoided and professional advice needs to be acted upon.
This can involve informal agreements that satisfy all parties but it might also mean entering an official form of insolvency.
In our experience, whatever scale your debts might have reached, it is always best to address the underlying issues directly and to engage with the reality of the situation as early as possible. Where this approach is not taken it is likely that your debt problems will manifest into a much more problematic situation.
Unlicensed debt advisers will often be unable to provide the kind of advice and guidance that is required to ensure that an individual debtor is able to address his or her financial problems and find a solution that is best suited to their situation. What's more; unlicensed advisers are effectively unaccountable and their activities are unregulated.
At Begbies Traynor we are able to offer free consultations to anyone who is unsure of how best to proceed when it comes to dealing with their personal debt problems. Therefore, we are pleased to see R3 making clear that anyone with serious debts should only seek out the advice of properly licensed insolvency practitioners, who are “uniquely well qualified to help people in financial difficulties”.
As R3’s latest documents on the subject reiterate, insolvency practitioners are highly regulated and bound by professional rules that dictate the terms under which they act in the context of any insolvency scenario.
Although they are obligated to act on behalf of creditors and to work towards ensuring that their repayments are maximised, insolvency practitioners also have a great deal of highly relevant expertise and experience in relation to debtor issues. Therefore, they are exceptionally well placed to deliver unbiased and completely objective guidance that can be invaluable for anyone uncertain about how best to proceed in tackling their debt problems.
Joanne is a Licensed Insolvency Practitioner with over 20 years experience in insolvency. She is a fellow of the IPA and chairs the Personal Insolvency Committee. She also sits on the IPA Council.
Joanne has specialised in personal insolvency for over fifteen years and has particular expertise in preparing bespoke Voluntary Arrangements tailored to professionals and professional practices plus has extensive experience of Bankruptcy situations which require detailed investigations.