Proof of debts-bankruptcy and liquidation, Financial Accounting


The following rules apply as to the proving of debts:

1) A creditor has no right to vote or receive dividends until his debt is proved to the satisfaction of the trustee;

2) Proofs should be made by affidavit as soon as possible after the receiving order - but may be accepted at any time before the final dividend;

3) Proofs may be made provisionally accepted for voting at the first meeting of creditors;

4) The trustee (but not the O.R.) must deal with a proof within 28 days of receipt; if the proof is rejected the creditor may appeal to the court within 21 days;

5) The trustee must satisfy himself that there is a real debt; he is not bound by any judgement or  estoppel against the debtor;

6) The trustee may apply to the court to expunge or reduce a debt wrongfully admitted;

7) The trustee must each month file with the court all proofs admitted or rejected in the previous month and on declaring a dividend he must send to the court a list of proofs so filed;

8) Proof on a contingent debt may be admitted for dividend purposes but not for voting while the contingency remains;

9) Double proof is not allowed in the same bankruptcy for the same debt but proof may be lodged against two separate estates for the same debt.

Posted Date: 12/13/2012 1:12:43 AM | Location : United States

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