IVA Glossary
P
Proof of Debt
In case of insolvency, there are several documents that must be submitted, among which one is the Proof of Debt. This statutory document establishes a creditor's claim. A Proof of Debt might be informal (for instance, when a letter is submitted) or it may be in a prescribed form which is more formal. This latter is the typical document form for bankruptcy as well as for compulsory insolvencies or liquidations. No matter if it is informal or formal, but a Proof of Debt has to be completed by creditors and it has to state how much they are owed.
It should also be noted that submitting such a claim might be optional in case of voluntary liquidations. In such situations, Proof of Debt is only required if a creditor wants to be entitled for vote at Creditors' Meetings, or if the Liquidator asks him/her to submit a Proof. On the other hand, it is a must for creditors to submit a Proof of Debt in case of compulsory liquidations.
After being submitted, the Proof of Debt is supplied by the person responsible for supervising the Individual Voluntary Arrangement or IVA. The licensed insolvency practitioner will have this way the legal document that contains the amount of debt owed to a creditor.
It should also be noted that submitting such a claim might be optional in case of voluntary liquidations. In such situations, Proof of Debt is only required if a creditor wants to be entitled for vote at Creditors' Meetings, or if the Liquidator asks him/her to submit a Proof. On the other hand, it is a must for creditors to submit a Proof of Debt in case of compulsory liquidations.
After being submitted, the Proof of Debt is supplied by the person responsible for supervising the Individual Voluntary Arrangement or IVA. The licensed insolvency practitioner will have this way the legal document that contains the amount of debt owed to a creditor.
