A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
How to Make a Claim as a Creditor
If a company that owes you money goes into liquidation, you need to submit a claim to the liquidator to share in any distribution. Understanding the process helps you protect your interests and maximise your recovery.
Step 1: Get the Right Information
When a company enters liquidation, the liquidator will notify known creditors. The notice will include:
- The date of liquidation
- The name and contact details of the liquidator
- A deadline for submitting claims (if any)
- Instructions on how to claim
If you have not received a notice but believe you are owed money, contact the liquidator directly - the company's records may not be complete.
Step 2: Complete the Proof of Debt
You will need to complete a proof of debt form, setting out:
- Your name and contact details
- The amount you are owed
- The nature of the debt (goods supplied, services rendered, etc.)
- When the debt arose
- Supporting evidence - invoices, contracts, correspondence
Be thorough and accurate. The liquidator will verify your claim before allowing it.
Step 3: Submit Your Claim
Submit your proof of debt to the liquidator by the deadline, with supporting evidence. Keep copies of everything you send. The liquidator will acknowledge your claim and assess it.
Step 4: The Liquidator Verifies Your Claim
The liquidator reviews your claim and either admits it, admits it in part, or rejects it. If your claim is rejected, you can ask for it to be reconsidered, or in some cases apply to court.
Step 5: Any Distribution
If the liquidation realises sufficient funds, distributions are made to creditors in the statutory order. As an unsecured creditor, you may receive a dividend (a percentage of your claim), or nothing if funds are insufficient. The process can take many months.
What If You Are a Secured Creditor?
If you hold security over an asset, you have rights over that asset and are paid from its proceeds first. You can still claim for any shortfall as an unsecured creditor.
Speak to a Licensed IP
If you are a creditor of an insolvent company, our Manchester-based practitioners can advise on your position and how to protect your interests.