Personal insolvency – the condition whereby an individual (in business or otherwise) is unable to meet all of their debts as they fall due – can arise in a great variety of situations. The individual may be a sole trader, they may have guaranteed a level of credit provided to a company, they may be facing an unexpected tax liability or claim. They may have been wronged in some way and suffered a financial loss as a result, but be unable (from their own resources) to afford the litigation required to address that wrong.
Personal insolvency is often extremely distressing, not only for the debtor themselves, but also for their families and can often impact as badly or worse upon non-insolvent business partners, co-owners of property, employers and others. The Insolvency team at Paris Smith is sensitive to these issues and often able to assist in the resolution of personal insolvency scenarios and/or the mitigation of their worst effects on debtors and those around them.
Members of the Insolvency team often work with insolvency practitioner accountants who are qualified and appropriately regulated to provide advice as to a whole range of options, many of which will involve one or more legal processes with which we can assist. We can bring this external expertise in as necessary but we also act for insolvency practitioner trustees who are tasked with recovering assets and pursuing claims (such as transactions at undervalue and preference claims) against individuals. That experience allows us to offer insights to individuals in terms of how best to avoid, tackle and (if necessary) defend such claims.
In higher value and more complex personal insolvencies, such as the bankruptcy of a formerly wealthy individual faced with even higher value liabilities, personal insolvencies also involve a significant amount of corporate and/or property and trusts law, where it is important to be able to call in experts in those disciplines who understand how they operate in an insolvency context.
Since we are alive to the consequences of personal insolvency, we can also assist lenders and borrowers in non-contentious scenarios, where there may currently be no fear of insolvency at all, but where a future insolvency could cause creditors or insolvency practitioners to scrutinise a dealing or transaction after the event.
Mike Pavitt, head of Paris Smith’s Insolvency team, has for many years been recognised as one of a relatively short list of UK-wide experts in personal insolvency by the legal directory Chambers and Partners. He acts for trustees in bankruptcy and IVA nominees and supervisors at a range of insolvency practices, including BDO, Begbies Traynor, James Cowper, KPMG, Mazars, Moore Stephens, and Smith & Williamson. He also has particular experience in complex bankruptcy annulments, insolvent deceased estates, bankruptcy jurisdiction disputes and cross-border asset recovery.
