Insolvency refers to the inability for a 'limited liability' company to pay off its debts. There is cashflow insolvency, meaning that a business is unable to pay debts as they become due. There is also balance sheet insolvency, which means that a business has negative net assets; i.e that the company's liabilities exceed their assets.
Insolvency is defined in terms of cash-flow and balance sheet in the UK Insolvency Act 1986, Section 123, which reads in part:[1]
123. Definition of inability to pay debts
(1) A company is deemed unable to pay its debts - [...]
(e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due. This is known as cash flow insolvency.
(2) A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities. This is known as balance sheet insolvency.
Modern insolvency legislation and debt restructuring no longer rely on liquidation and elimination of insolvent entities but on the adaptation of financial structure of debtors experiencing financial distress, to allow the rehabilitation of the business.
Debt restructuring is a process that allows a business facing cash flow problems and financial turmoil, to reduce and change the terms of its debts in order to restore liquidity and save the business. It's in everyone's interest that the business survives - so that the debts can be paid!
An administrator in an insolvency team will work closely with a debt management team who refer cases to your insolvency team, meeting and notifying creditors of the results of the debt restructuring process.
In order to qualify for an insolvency administrator job, you will be expected to have some experience within the insolvency field, a good team work ethic and the ability to work on your own. Insolvency is an enjoyable working environment that can offer long term career opportunities to those who pursue knowledge.
As an insolvency administrator you will be responsible for running a mixed case load, including administration, compulsory and voluntary liquidation. CPI or ACCA qualified candidates are preferred.
Insolvency administration is a great opportunity for applicants looking for high quality work with generous remuneration in established institutions which are people-orientated. Particularly in this period of financial uncertainty, Insolvency could be an excellent career choice.
Author Resource:-
Commercial Finance People is a specialist recruitment consultancy, established in 1998 to place candidates in insolvency jobs, corporate recovery Jobs, corporate restructuring jobs, factoring/invoice finance jobs banking jobs, and insolvency administrator jobs.
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