If a company goes into administration, a creditors’ voluntary liquidation or a compulsory liquidation, an unsecured creditor is paid only if it submits a proof of debt to the office holder, as rule 14.3 of the Insolvency (England and Wales) Rules 2016 requires. An admitted proof gives the creditor a vote in creditors’ decisions and a share of any dividend. Dividends are declared after a notice that fixes a last date for proving at least 21 days ahead.

Who has to submit a proof of debt, and what can be claimed?

Rule 14.3 says a creditor who wants to recover a debt must submit a proof to the office holder (the administrator or liquidator) unless the rules or a court order say otherwise. There are three main exceptions.

  • Members’ voluntary liquidation. A creditor of a solvent company being wound up does not need to prove unless the liquidator asks for a proof.
  • Moving between procedures. If an administration is followed immediately by a winding up, or the other way round, a creditor who proved in the first procedure is treated as having proved in the second.
  • Small debts. A small debt is a total debt of £1,000 or less (rule 14.1). The office holder can treat it as proved for dividend purposes if the dividend notice names the amount shown in the company’s records and the creditor does not say the figure is wrong (rules 14.3(3) and 14.31). This deemed proof counts for the dividend only, not for voting.

Rule 14.2 makes almost every claim provable: present or future, certain or contingent, fixed or sounding only in damages. A claim in tort is provable if the cause of action had accrued by the relevant date, or all of its elements existed apart from actionable damage (rule 14.1(4)). A few debts, such as obligations under confiscation orders, cannot be proved.

The relevant date is usually the date the company entered administration or went into liquidation (rule 14.1(3)).

What must a proof of debt contain?

Rule 14.4 lists what a proof must contain. It must be made out by or for the creditor and authenticated, and it must state:

  • the creditor’s name and address, and the company’s identity if the creditor is a company;
  • the total claim, including VAT, as at the relevant date, less any payments received after that date and any set off;
  • whether the claim includes uncapitalised interest;
  • how and when the debt was incurred;
  • details of any security, the date it was given and the value the creditor puts on it;
  • details of any retention of title over goods the debt relates to;
  • details of documents that support the claim. The documents do not have to be sent unless the office holder asks for them.

Each creditor pays its own costs of proving (rule 14.5).

Interest needs care. Under rule 14.23, interest that the debt already carries is provable up to the relevant date but not after it. If no interest was agreed, the creditor can claim interest only if a written demand was sent before the relevant date with notice that interest would run from the date of the demand. That interest runs only from the demand to the relevant date, at no more than the rate under section 17 of the Judgments Act 1838.

How do security and set off change the amount you can prove?

A secured creditor values its security in the proof. If it later sells the asset, the net proceeds are treated as an amended valuation and it proves for the balance (rule 14.19). A creditor can also surrender the security and prove for the whole debt as an unsecured creditor.

In a winding up, set off is automatic. Rule 14.25 says that if the company and the creditor had mutual dealings before liquidation, an account must be taken and the sums set against each other. Only a balance owed to the creditor is provable. A balance owed to the company must be paid to the liquidator. Debts taken on when the creditor knew a winding up petition was pending are excluded.

How does the office holder decide on a proof, and can you appeal?

The office holder may admit or reject a proof for dividend in whole or in part. Reasons for any rejection must be given as soon as reasonably practicable (rule 14.7). If a debt has no certain value, for example because it is contingent, the office holder must estimate it, tell the creditor, and may revise the estimate later (rule 14.14).

A creditor unhappy with the decision on its own proof, including a decision on whether it is preferential, may apply to court within 21 days of receiving the statement of reasons (rule 14.8). Another creditor or a member who objects to a proof being admitted can apply within 21 days of becoming aware of the decision.

How does voting work once you have proved?

Creditors now rarely meet in person. Under section 246ZE of the Insolvency Act 1986, decisions are made by a qualifying decision procedure, such as an electronic vote or a virtual meeting. A physical meeting is held only if requested by 10% in value of the creditors, 10% in number, or 10 creditors. Many routine decisions use the deemed consent procedure in section 246ZF. The proposal goes through unless creditors with 10% in value of the voting claims object. Decisions on the office holder’s remuneration cannot be made by deemed consent.

In an administration, a creditors’ voluntary liquidation or a compulsory liquidation, rule 15.28 lets a creditor vote, or object under deemed consent, only if all of these apply:

  • it has delivered a proof;
  • the proof arrived by the decision date (for a meeting, by 4pm on the business day before);
  • the proof has been admitted for voting.

Rule 15.31 values votes by the amount of the claim. A debt of uncertain amount can vote only if the convener puts an estimated minimum value on it. A fully secured debt votes at nil, and a partly secured debt votes only for the unsecured part.

Under rule 15.34, a decision passes when a majority in value of those voting are in favour. In an administration, a decision also fails if more than half in value of the unconnected creditors who were given notice vote against it. A company voluntary arrangement needs at least three quarters in value of those responding.

How is a dividend declared and paid?

Before declaring a dividend, the office holder sends a notice to creditors who have not yet proved (in an administration, to all creditors) under rule 14.29. Rule 14.30 says the notice must:

  • say the dividend will be declared within two months of the last date for proving;
  • say whether it is an interim or final dividend;
  • give one last date for proving for everyone, at least 21 days after the date of the notice;
  • state the value of the prescribed part, if there is one, where unsecured creditors are to be paid (rule 14.29(3)).

Within 14 days of the last date for proving, the office holder must admit or reject the proofs received or make provision for them. The office holder does not have to deal with proofs that arrive late (rule 14.32). No dividend can be declared while a court challenge to a proof is pending, unless the court gives permission (rule 14.34).

The declaration notice must show the amounts realised, the office holder’s payments, any provision for unsettled claims, the total being distributed, the rate of dividend and whether more is expected (rule 14.35). Unsecured creditors in a voluntary winding up share pari passu, which means in proportion to their admitted claims (section 107). An administrator cannot pay ordinary unsecured creditors without court permission, except out of the prescribed part (Schedule B1, paragraph 65). If nothing can be paid, the office holder must say so and explain why (rule 14.37).

What does a claim look like in practice?

Illustration only. A supplier is owed £12,000 including VAT when its customer goes into creditors’ voluntary liquidation. The supplier also owes the customer £2,000 for goods it bought back. Set off is mandatory, so the supplier proves for £10,000 and gives the invoice references in the proof. The terms of trade did not provide for interest and no written demand mentioning interest was sent, so no interest is claimed.

The liquidator later sends notice of an intended first dividend with a last date for proving 28 days away. After expenses and preferential debts, £50,000 is available for unsecured creditors, whose admitted claims total £500,000. The dividend rate is 10p in the pound, so the supplier receives £1,000.

What mistakes cost creditors money?

  • Missing the last date for proving. The office holder is not obliged to admit a proof that arrives after it, and a dividend can be paid without you.
  • Ignoring set off. Claiming the gross amount when you also owe the company money leads to rejection and delay.
  • Claiming interest after the relevant date. Interest after the company entered administration or liquidation is not provable under rule 14.23. In an administration it is paid only if there is a surplus.
  • Waiting for the dividend notice. Without an admitted proof by the decision date, you cannot vote on the office holder’s fees or other decisions.

For how secured and preferential claims rank ahead of you, see fixed and floating charges and HMRC as a secondary preferential creditor. For the debt in your own books, see bad debts.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.