Completing a proof of debt form
The proof of debt form is used to formally lodge a claim in an insolvency process. Once received by the Insolvency Practitioner they may file the claim, admit the claim for voting purposes or agree the claim for dividend purposes.
The contents of the form is mainly self explanatory but how it is completed depends on the type of creditor.
Employee claims
Employee claims are typically more complex than normal trade creditor claims and as such Insolvency Practitioners, before paying a dividend, should inform employees of what they think their claim is. Employees can inform the practitioner if their calculation is incorrect.
In many cases the amount of an employee's claim is low as the redundancy payment service would have settled most of the claim.
However at the start of a case, should the employee wish to vote at meetings then they should provide details of their total claim if they have not been paid anything by the DTI. The claim can then be updated later in the process to reflect the fact that the DTI has paid some of the claim.
It is usually not vital to submit a claim immediately and the practitioner will normally chase for any missing claims. However the responsibility for submitting a claim does ultimately rest with the employee creditor.
For help in working out what can be claimed use the Employee Entitlement calculator.
In terms of the categories of debt that is classified as preferential, for an employee this includes:
Wages owed up to £800;
Holiday pay owed; and
Certain pension liabilities (but these would be claimed by the pension scheme;
In the 'Details of documents section' it is normally sufficient to provide a copy of the RP1 form completed and refer to it. The practitioner will request additional information if they require it.
Any section regarding claim net of VAT and capitalised interest can be ignored.
If asked the 'Particulars of how and when the debt was incurred' enter 'employment' and the dates owed money for.
In the case of employee claims it is unlikely that any security is held. Security refers to a Companies Act registered charge or other proprietory rights over assets of the company. If you think that you may have security seek legal advice. Otherwise enter 'none' in this section.
The form must then be signed and names placed in block capitals. In terms of 'Position or Relationship with creditor' just enter 'creditor'.
Other creditors
The total claim should be entered including VAT and any interest up to the date of the insolvency.
It is highly unlikely that any of the claim would be classed as preferential.
In terms of the sections regarding how the debt was incurred and how the debt can be substantiated this will depend on the nature of the debt. For goods supplied this may be 'Goods supplied' and 'Invoices and proof of deliveries'.
In the security section consider including any Reservation of Title claim you may have, any levies of distress as well as any formal forms of security registered against the company. It is important that this section is completed correctly as failure to provide details could jeopardise the creditor's rights in certain procedures.
The form must then be signed and names placed in block capitals.
