Becoming an Insolvency Practitioner

At Aryza Comply we receive a number of enquiries each year around the topic; ‘How do I become an Insolvency Practitioner?’ ‘Do I need a formal qualification?’ ‘Do I need to be experienced or qualified in any other sense prior to seeking to become an Insolvency Practitioner?’ Here we answer these questions, and more…

What is an Insolvency Practitioner?

Part of the answer we give to the questions above is that most people work in the insolvency and restructuring sector without actually being an ‘Insolvency Practitioner’ (‘IP’). This title, also known as a ‘licenced insolvency professional’, is reserved for those who, quite literally, head up a ‘case’ or ‘job’ where either a corporation or individual is seeking some form of insolvency or restructuring solution.

This could be the Liquidation, Administration or Voluntary Arrangement of a company, or the Bankruptcy or Voluntary Arrangement of an individual.

CPI or CII

The essential personnel of their firm or company who work with the IP to effect this solution can be qualified in other ways; for example by having passed the Certificate of Proficiency in Insolvency (‘CPI’) or Certificate in Insolvency (‘CII’) examinations. Others may be very experienced in actually performing their role on a daily basis, but have no formal or recognised sector specific qualifications.

The JIEB or ‘Grandfathering’

Since 1990 an Insolvency Practitioner in the legal jurisdiction of England & Wales must have passed the Joint Insolvency Examination Board’s (‘JIEB’) qualifications in Corporate Insolvency and Personal Insolvency, or can have passed just one of those papers to be licenced specifically in that area of insolvency.

Prior to 1990 it was possible to be ‘grandfathered’ into becoming an IP by dint of being in the profession and doing the job for a number of years. That is no longer possible, but some more senior members of the profession practice as Insolvency Practitioners via this process.

Relevant Experience

In addition to studying for and passing one or both of the JIEB’s annual examinations a person working in the profession must also have a minimum of 600-hours relevant or practical ‘higher insolvency administration experience’ over the three to five years before they make an application to apply for a licence. Only when they are granted that licence (by one of the two Recognised Professional Bodies in the sector, the IPA or ICAEW) can they be called, and act as, an ‘Insolvency Practitioner’.

Insolvency Career Path

The Joint Board or JIEB is the ‘premier qualification’ in the sector. The syllabus is long and detailed, the courses last over ten months and the two exams, sat once a year in November, can be intellectually exacting, time pressured and very challenging.

JIEB Courses at Aryza Comply

Aryza Comply offer a range of courses for those who wish to study for the JIEB, ranging from distance learning (with many teaching webcasts, tests and exercises on our award-winning app, together with an interactive study planner, all materials and access to our glossary of words, terms, acronyms and phrases and our unique updating service ‘CPD TAP’) to a full Study Support Programme that offers 12 face-to-face lectures.

Introduction to the Career: ITIQ

The journey of the Insolvency Practitioner can start with our comprehensive on-app Introduction to Insolvency Qualification (‘ITIQ’). This comprises of 25 webcasts on all the terms, processes, procedures and practical application a new recruit will need to build a vocabulary for the sector they are joining.

Very often this gives the new recruit both the competence and confidence to work alongside their colleagues in what is, for them, a new and exciting career. Understanding the basic terms and processes will empower them to understand the basics of what is going on around them and to join in with meetings and conversations.

CPI and CII

This often leads to the recruit working in and gaining experience of the many different types of insolvency and restructuring solutions in our sophisticated and highly successful sector. Some go on, after two or three years, to sit one of two qualifications: the Certificate of Proficiency in Insolvency (‘CPI’), the examination of the Insolvency Practitioners Association (‘IPA’). The other is the Certificate in Insolvency (‘CII’), the examination of the Chartered Institute of Accountants in England and Wales (‘ICAEW’).

Both the CPI and CII have extensive and very practical syllabi, incorporating both corporate and personal insolvency, as well as full coverage of insolvency numbers, ethics, Statements of Insolvency Practice (‘SIPs’) and key regulations. They are excellent qualifications of great renown within the profession and many find that acquiring one of these qualifications, wedded with extensive practical experience on the ground, works well for them in the building of their career.

Aryza Comply also offer a range of very successful courses for both of these qualifications and we are very proud that our students have enjoyed huge success in passing them over a number of years.

Moving on to the JIEB

Only some go on from one of the above qualifications to study for and sit the JIEB. In fact, a person can study for and sit one or both of the Joint Board’s exams without having any previous qualifications or experience in this or any other professional sector.

It is not something we at Aryza Comply would recommend, but we respect that a person’s career choices and the path they take to achieve them are a matter for them. Our highly gratifying role is to work in lockstep with them to achieve the success their hard work richly deserves.

The Role of the Insolvency Practitioner

If the directors of a company recognise their business may either be encountering financial or other commercial difficulties, or could encounter them should market forces or the economic situation continue, they may choose to seek the advice of a professional with extensive knowledge and understanding of business in general and the options available to them.

In this way an Insolvency Practitioner (‘IP’) can be asked to give ‘advisory’ input to a business, helping to understand the pinch points of it, the commercial realities and the chances of future recovery.

In the alternative, one of the roles of an IP and their team can be to give advice on insolvency (end of the company’s legal ‘life’) or restructuring (enabling the company to continue having made changes to its structure, ownership, financial investment and approach). The end of a company’s life is called ‘dissolution’, a legal process following an insolvency process called ‘Liquidation’.

A positive and often achieved alternative stems from restructuring, including ‘Administration’, ‘Company Voluntary Arrangement’ or ‘Restructuring Plan’. With all of these potential solutions the emphasis is on the survival of the company, albeit sometimes in a different format under new owners.

With personal insolvency an IP can fill the role of a Trustee in Bankruptcy with the debtor being made Bankrupt in order to solve, over a protracted period of time – often 12 months, or form an ‘Arrangement’ with their creditors with an Individual Voluntary Arrangement.