What Is A Proof Of Debt?

In order to explain how does a creditor prove a debt in insolvency the starting point point is what is a Proof of Debt?

A Proof of Debt is the document that records a creditors claim in an insolvency.

Without a Proof of Debt form being completed a creditor will not be recognised within the insolvent estate. The effect of that is that the creditor will not be able to:

  • vote on the appointment of an Insolvency Practitioner who is responsible for the insolvency
  • vote on any decisions that creditors are invited to participate in
  • be a member of a Creditors Committee
  • crucially participate in any distribution of the assets of the insolvency to creditors

For those reasons creditors MUST submit a Proof of Debt to the Insolvency Practitioner.

What Information Is Required For Creditors To Prove?

The information required from creditors to prove is set out in Rule 14.4 of the Insolvency (England And Wales) Rules 2016:

(1) A proof must—

(a) be made out by, or under the direction of, the creditor and authenticated by the creditor or a person authorised on the creditor’s behalf;
(b) state the creditor’s name and address;
(c) if the creditor is a company, identify the company;
(d) state the total amount of the creditor’s claim (including any value added tax) as at the relevant date, less any payments made after that date in relation to the claim, any deduction under rule 14.20 and any adjustment by way of set-off in accordance with rules 14.24 and 14.25;
(e) state whether or not the claim includes any outstanding uncapitalised interest;
(f) contain particulars of how and when the debt was incurred by the company or the bankrupt;
(g) contain particulars of any security held, the date on which it was given and the value which the creditor puts on it;
(h) provide details of any reservation of title in relation to goods to which the debt relates;
(i) provide details of any document by reference to which the debt can be substantiated;
(j) be dated and authenticated; and
(k) state the name, postal address and authority of the person authenticating the proof (if someone other than the creditor).

(2) Where sub-paragraph (i) applies the document need not be delivered with the proof unless the office-holder has requested it.

(3) The office-holder may call for the creditor to produce any document or other evidence which the office-holder considers is necessary to substantiate the whole or any part of a claim.

How To Fill In A Creditors Proof Of Debt Form?

A creditor who wants more detailed guidance and information, including an example of how to fill in a Proof of Debt form or a copy of such a form to download can view this informatoin at the following page How To Fill In A Proof of Debt And Proxy Form.

Filing A Proof Of Debt In Time

It is important that a creditor upon being provided with notice to file a Proof of Debt must ensure that they file it before the deadline supplied in the notice to them.

The case of Hutchings v Khalastchi [2022] EWHC 232 (Ch) was one in which a creditor proved their debt after the deadline date and they were not permitted to participate in the distribution to creditors.

Are you a creditor looking to recover your money?

If you are a creditor of an insolvent company or a bankruptcy, Oliver Elliot can help you address your claim and concerns arising from the insolvency.

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Disclaimer: How Does A Creditor Prove A Debt In Insolvency?

This page How Does A Creditor Prove A Debt In Insolvency? is not legal advice and should not be relied upon as such. This article How Does A Creditor Prove A Debt In Insolvency? is provided for information purposes only. You can contact us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

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