When a creditor lodges a proof of debt with the liquidator it is possible the liquidator will reject some portion of the claim or the claim in its entirety. Litigant may be able to assist by either negotiating between the creditor and the liquidator (whether by acting for one or the other), or by assisting the creditor (or liquidator) in respect of any application made to the court regarding a rejected proof of debt.
Here are some topics:
- What are provable claims?
- The External Administrator advertises for the lodgement of a proof of debt
- Are there any risks in lodging a proof of debt?
- The lodging of a proof of debt
- The liquidator then rules on the proof of debt
- Claiming a set-off with respect to the proof of debt
- How does Litigant help with proof of debt disputes
Creditors of an insolvent company may have provable claims against the company in respect of unpaid debts (as an example).
Provable claims can be: –
- present,
- future,
- etc
However, provable claims are not future costs orders
The External Administrator advertises for the lodgement of a proof of debt
- The first step involves the liquidator notifying creditors of the submission date for lodging a proof of debt.
- The advertisement is usually in a newspaper or on insolvency notice website.
- The proof of debt needs to be lodged within the required period.
Are there any risks in lodging a proof of debt?
Yes, the holder of a security interest may face some risks in lodging an unqualified proof of debt as it may impact on the security.
The lodging of a proof of debt
Creditors would:
- submit a proof of debt (including particulars of debt), and
- have it ruled upon by the administrator, and
- receive a proportionate share of any distribution (if any).
The liquidator then rules on the proof of debt
Liquidator will then:
- admit all or part of claim, or
- reject all or part of claim, or
- require further evidence.
Claiming a set-off with respect to the proof of debt
Where there are mutual claims between a creditor and insolvent company it may be necessary to apply set off and then lodge a proof of debt in respect of the unpaid component.
How does Litigant help with proof of debt disputes
Typically, litigant does not lodge a proof of debt on behalf of a creditor.
However where a proof of debt is rejected in whole or in part and there is a likely court dispute then we may be able to assist either the creditor or the liquidator in respect of resolving the matter before the court.
For more information, contact our insolvency dispute lawyers.
Talk to a Dispute Lawyer today!
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