IVA or Bankruptcy? Insolvent Professional (Pt.5) RPBs
In the first five articles in this series, we looked at the possible effects of insolvency on the careers of those engaged in a variety of professions: accountants, members of the police and of the armed forces, members of the medical, dental, veterinary & pharmaceutical professions and those engaged in the practice and administration of law.
It might come as a surprise to some that there is a whole range of additional professions which may be affected by insolvency. Many of the recognized professional bodies (RPBs) governing professions have their own rules and regulations in regard to a member becoming insolvent and these may be revised from time to time. Furthermore, the attitude of any particular RPB and its standard practice in dealing with an insolvent member may also vary somewhat depending on a number of factors. The most serious sanctions applied range from mandatory expulsion to discretionary expulsion from the RPB and possible loss of licence or accreditation. Such a sanction might mean loss of livelihood for the professional.
Professions which may be affected include: approved driving instructor, architects, holders of consumer credit licences, members of the IPA, local government councillors, members of parliament, estate agents, holders of operator’s licences for HGV or PSV, school governors, trustees of charities and trustees of pension schemes and others.
The relevant RPB may implement a variety of mandatory and discretionary sanctions when a member becomes insolvent and either opts for Bankruptcy (BCY) or enters into an Individual Voluntary Arrangement (IVA). In an ideal world the potentially insolvent professional could check directly with his or her RPB to determine such effects but many professionals would be understandably reluctant to do so, lest their questions alert their RPB to the situation prematurely. A reputable Insolvency Practitioner (IP) could however elicit such detailed information from the RPB on a confidential and anonymous basis on behalf of a professional client who is insolvent or is likely to become so.
If not already a member, anyone applying to join an RPB governing their profession should disclose significant issues relating to their financial status, particularly if insolvent or likely to become so. Better to address such issues up front than to have to deal with them after joining the RPB as failure to disclose may incline the RPB to exercise its discretionary powers of sanction. Anyone who is already a member of an RPB and is threatened with insolvency should familiarize themselves with the rules and regulations of the RPB and try to determine its attitude and standard practice in these matters.
If the RPB maintains a benevolent fund for members, an insolvent member could consider consulting with its trustees but before doing so should consider taking independent legal advice before making what could turn out to be a career threatening decision. A reputable insolvency practitioner will also provide invaluable advice on all the available options open to an insolvent professional. Such advice should be provided free of charge. Alternative sources of advice are CAB and the CCCS.
To explore this option further please contact us at National Debt Relief.
About National Debt Relief
National Debt Relief belong to a firm of leading chartered accountants who are one of the largest insolvency practices in the UK. We offer a complete portfolio of personal insolvency services in relation to IVAs, Debt Management Plan and Bankruptcy. All our advice is free. If you decide that you wish to pursue the IVA option, we will still provide advice on all of the other options and if we consider an alternative option to be more appropriate to your case and circumstances, we will tell you this. All of our approved IVA’s are administered by Licensed Insolvency Practitioners. We charge no fees and receive no income until your IVA is accepted by your creditors and then our fees come out of your agreed payments to your creditors. If your creditors do not accept your IVA, we receive no fees whatsoever.
Call us on 0800 043 5135 or 028 71 376854 or email enquiries@nationaldebtrelief.co.uk
