The Dangers of Unregulated Insolvency Advisers

Licensed insolvency practitioner vs Lead generation company

If your company is experiencing financial and/or operational distress, your first port of call should be to seek the services of a licensed insolvency practitioner. An insolvency practitioner is a regulated professional with the skills, knowledge, and qualifications required to give advice and place your company into a formal insolvency process.

Unfortunately unqualified advice is rife in the corporate insolvency industry which is why company directors must be on-guard and seek qualified and reputable advice from licensed insolvency practitioners.

In recent years, we’ve seen unfortunate growth in the number of rogue advisers – particularly online –  who often purport to be regulated firms with licensed insolvency practitioners but are often merely lead generation websites that act as middlemen before passing your enquiry onto rogue ‘advisory’ firms with no reputation or regulation.

Our approach couldn’t be more different.  We act as standard-bearers for the corporate insolvency industry with over 100 licensed insolvency practitioners working in our offices across the country all regulated by the IPA, ICAEW or ICAS.

 

 

 

 

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You should be extremely cautious particularly if you have an overdrawn directors' loan account or have significant personal assets. An unscrupulous adviser will often make false promises regarding the repayment of on overdrawn directors' loan account only to then chase for repayment at a later date.

At Real Business Rescue, all our insolvency practitioners are fully licensed and are here to give you advise you can trust. We will conduct a thorough audit of your position as director, and explain any personal liability you may have towards the debts of your company.

If you have an overdrawn directors' loan or if you have signed a personal guarantee for company borrowing, rest assured we will explain what this means for you on a personal level before you sign on the dotted line. 

When choosing an insolvency firm to handle your company's liquidation, be on the lookout for these common warning sign of a rogue, unlicensed or untrustworthy adviser:

• Advertises a 'too good to be true' cheap fixed fee - they will often boost their fee at a later stage with hidden costs
• Charging up-front fees by a middleman who then passes you to an insolvency practitioner
• No explanation of how an overdrawn directors' loan could affect an insolvency process
• Over billing for ‘time spent’ which doesn’t represent the amount of work carried out
• Exuberant promises that debts would be written off without understanding the company’s level of debts or whether debts were personally guaranteed
• Pushiness on the phone towards a particular service when other services would be more beneficial
• Poor or no communication after a fee had been paid
• Failure to explain the chosen process, e.g. Creditors’ Voluntary Liquidation, clearly
• Creditors still hounding you, despite being under the protection of a formal insolvency solution, which your practitioner should have contacted them about
• Unhelpful about redundancies and how an insolvency process would affect your workforce
• Unregulated firm with no membership to a relevant professional body
• Advice that errs on the side of potential tax avoidance that could trigger an HMRC investigation
• No professional qualifications to substantiate advice 
• Questionable professional standards, such as a history of misconduct

 If your company is struggling with unmanageable debts, squeezed cash flow, or an uncertain future, you are far from alone. We speak to company directors just like you every single day, and we are here to give you the help and advice you need.
Call our team today on 0800 644 6080

If you are looking for regulated and qualified advice from a licensed insolvency practitioner, speak to the team at Real Business Rescue today. We offer a free initial consultation to all directors and can advise on a range of corporate solutions including HMRC arrears, winding up petitions, statutory demands, cash flow problems, finance options and more.