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Getting your proof of debt right is the difference between being paid and missing out. Boss Lawyers helps creditors protect their claims in insolvency proceedings.
When a company enters liquidation or voluntary administration, creditors must lodge a formal proof of debt to participate in any distribution of the company’s assets. The proof of debt process is technical, and errors or omissions can result in your claim being rejected or admitted for a lesser amount.
At Boss Lawyers, we assist creditors to prepare, lodge, and pursue proof of debt claims in all types of insolvency proceedings. We also act for creditors whose claims have been rejected by a liquidator or administrator, including appeals to the Court.
If you are owed money by a company that has gone into external administration, do not assume the process is straightforward. Get proper advice to ensure your claim is properly documented and maximised.
A proof of debt is a formal document lodged by a creditor with a liquidator or administrator to prove the existence and amount of the creditor’s claim against the company. It is the mechanism by which creditors establish their right to participate in any distribution of the company’s assets.
Proofs of debt are governed by the Insolvency Practice Rules (Corporations) 2016 and the Corporations Act 2001 (Cth). The formal proof of debt form is Form 535 (for companies) or the equivalent form prescribed by the relevant insolvency practitioner.
A proof of debt is required in:
Timing matters. You should lodge your proof of debt:
If you are unsure whether you need to lodge a proof of debt or when to lodge it, contact the liquidator or administrator’s office — or get legal advice.
A proof of debt form requires the following information:
The proof of debt must be signed by the creditor or an authorised representative. For corporate creditors, this typically means a director or company secretary.
Your proof of debt should be supported by comprehensive documentation. The stronger your supporting evidence, the more likely your claim is to be admitted in full. Key documents include:
The liquidator or administrator has the power to admit or reject proofs of debt in whole or in part. They must give the creditor written notice of any rejection, including reasons.
Common reasons for rejection include:
If your proof of debt is rejected, you have the right to appeal to the Court under Rule 75-42 of the Insolvency Practice Rules (Corporations) 2016. The appeal must be brought within 14 days of receiving notice of the rejection (or such further time as the Court allows).
On appeal, the Court will review the evidence and determine whether the claim should be admitted. Creditors whose claims are rejected should obtain legal advice promptly, given the tight timeframe for appeal.
The distinction between secured and unsecured creditors is critical in insolvency proceedings because it determines the order of priority for payment.
Secured creditors hold a security interest over some or all of the company’s property — for example, a bank holding a mortgage over the company’s real estate, or a supplier holding a PPSR-registered security interest over supplied goods. Secured creditors can enforce their security and recover from the secured property ahead of unsecured creditors.
Unsecured creditors do not hold any security over the company’s property. They share in any remaining assets after secured creditors and priority creditors (including employees) have been paid. In many liquidations, unsecured creditors receive little or nothing.
The Corporations Act prescribes the following general order of priority:
Here are practical tips for creditors dealing with proof of debt matters:
For more information about our insolvency services, contact Boss Lawyers on 1300 267 711.
The proof of debt process can seem straightforward, but it is often more complex than creditors expect. Claims can be partially rejected, security interests challenged, and distributions delayed. Getting it right from the start saves time, money, and frustration.
At Boss Lawyers, we help creditors navigate the proof of debt process with confidence. We prepare claims that are thorough and well-supported, engage with liquidators and administrators on your behalf, and fight for your rights if your claim is rejected.
Whether your claim is for thousands or millions of dollars, we bring the same level of care and attention to every matter.
At Boss Lawyers, we understand that creditors in insolvency proceedings are often dealing with significant financial loss. Our role is to maximise your recovery by ensuring your claim is properly prepared, documented, and pursued.
We bring over 22 years of combined experience to every proof of debt matter. We know what liquidators look for, what evidence supports a strong claim, and how to appeal if your claim is rejected.
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Leveraging 22+ years of combined experience and a proven track record across 3,000+ client matters.
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We work closely with you to understand your unique situation and develop a tailored approach.
For experienced proof of debt advice in Brisbane
Strictly, no. Any creditor can lodge a proof of debt form. However, for complex or significant claims, legal assistance can ensure your claim is properly prepared, fully documented, and maximised. Errors in the proof of debt process can result in your claim being rejected or reduced.
If you miss the deadline set by the liquidator, you may still be able to lodge a late proof of debt, but you will only be entitled to participate in future distributions — not distributions that have already been made. The liquidator has discretion to accept late claims, and you can apply to the Court if necessary.
You can claim interest that was contractually payable up to the date of the liquidation or administration. Post-appointment interest is generally not provable unless all other claims have been paid in full, which is rare in insolvency proceedings.
A formal proof of debt is the prescribed Form 535 completed and signed with supporting documentation. An informal proof of debt may be accepted for voting purposes at creditors’ meetings — for example, a letter from the creditor stating the amount owed. However, for distribution purposes, a formal proof of debt is usually required.
Yes. The liquidator has the power to admit a claim in full, admit it for a lesser amount, or reject it entirely. If you disagree with the liquidator’s assessment, you have the right to appeal to the Court within 14 days of receiving notice of the decision.
If you need experienced legal guidance regarding proof of debt and creditor claims, contact Boss Lawyers today. Call us on 1300 267 711 or complete the enquiry form above.
Boss Lawyers Pty Ltd — Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
