Leading with compassion – the qualities of an insolvency

Insolvency practitioners chaperone clients throughout pivotal moments of life, such as company liquidation or company administration. From closing a company on a positive and profitable note, closing a company due to business debts, to initiating the rescue of a beleaguered business, these events can be charged with high emotion. Shaun Barton of Company Closure, a leading company liquidation provider, answers what makes an ideal insolvency practitioner and what qualities are non-negotiable.

The essential qualities of an insolvency practitioner

While each insolvency practitioner will have unique talents, there are basic skills that must be well-established for an insolvency practitioner to succeed.

Personable

Acting as an insolvency practitioner involves interacting with clients who are navigating life's crossroads. An insolvency practitioner who is personable and has sharp interpersonal skills can forge strong, trust-based relationships with clients, helping them offer a strong support system.

Compassion

Due to the nature of insolvency and the duties of an insolvency practitioner, they are often present throughout major client milestones. Therefore, acting compassionately and displaying basic human sentiments, such as empathy, is a non-negotiable quality for an insolvency practitioner.

Technical expertise

An insolvency practitioner must pass their JIEB exams and engage in sufficient insolvency experience, a legal requirement, to successfully attain a license to act as an insolvency practitioner. Insolvency legislation can be complex and is always evolving and therefore, demands a high level of technical expertise and an adaptive nature.

Adaptive

An insolvency practitioner must be proactive to stay in tune with the latest legislation and tax changes. The rules governing the insolvency market and associated tax legislation are occasionally subject to reforms, so insolvency practitioners must be active in their field, highly adaptive, and receptive to change.

Experience

An experienced insolvency practitioner will understand the nuances of the trade and the pain points experienced by different sectors, as this can influence the recovery or liquidation timeline. This can provide unique insights that can enhance the innovative nature of advice and solutions. An insolvency practitioner with a wealth of experience may also have sufficient knowledge to specialise in a sector or service area.

Negotiation tactics

A fair portion of an insolvency practitioner’s role is negotiating with stakeholders, including creditors, to secure the best deal for all parties involved.

From negotiating payment arrangements with creditors to negotiating the best way forward for the business, an insolvency practitioner must possess strong negotiation skills.

Strong foundations – the background of an insolvency practitioner

There are natural entryways into insolvency through the accountancy and law professions, hence why insolvency practitioners commonly have an accounting or legal background. This can often propel them to thrive in niche areas, bring unique insights to the job, and share a more intricate understanding of financial processes.

The role of an insolvency practitioner is instrumental when closing the final chapter of a business or breathing new life into a business. An insolvency practitioner plays a critical role in revitalising cash flow, diffusing creditor pressure, and enhancing the tax efficiency of a business exit, which can be life-changing for clients and creditors.