How to Prove Your Debt in Company Liquidation: A Creditor’s Guide
If a company that owes you money has gone into liquidation, the first thing you need to do is prove your debt. Without a formal proof of debt, you are largely shut out of the liquidation. You generally cannot vote or receive a dividend, and you will find it much harder to influence or challenge how the liquidation is run.
The form itself is simple, but the mistakes creditors make on it are not. Proofs are often rejected because the amount is wrong, the supporting evidence is missing, or the creditor has included interest or costs that are not legally due.
We adjudicate proofs of debt on every case we handle, so the patterns below come from cases we have actually run, not from generic templates.
Quick Answer on How to Prove Your Debt in Company Liquidation
To prove your debt in a liquidation in England and Wales, you submit a proof of debt (usually on the liquidator’s own form) to the liquidator, setting out the amount owed, the basis of the claim, and supporting evidence.
The liquidator adjudicates the proof, which means they check whether the debt is valid, the amount is correct, and the evidence supports the claim. If accepted, the proof entitles the creditor to vote in creditors’ decision procedures and to share in any dividend paid to creditors of their class. If rejected, you can appeal to the court.
The key deadline is the last date for proving, which the liquidator sets before any distribution. Missing the deadline does not bar a late filing, but you cannot disturb a dividend that has already been declared.
You catch up on it only if there is money for a later dividend, and that catch-up is paid before other creditors receive anything more. File early, file accurately, and attach the evidence. Everything else follows from that.
Owed Money?
Owed Money by an Insolvent Company?
Where your claim sits in the queue, what to submit and what you are realistically likely to recover depend on the type of debt and the procedure the company is in.
Read the guide for creditorsWhat a Proof of Debt Must Contain in a Company Liquidation
A valid proof of debt under the Insolvency (England and Wales) Rules 2016 must include:
- The creditor’s name and address. If the creditor is a company, the proof must identify the company.
- The total amount claimed, including VAT. This should be the amount owed at the date of the winding-up resolution (for a CVL) or the date of the winding-up order (for compulsory), less any payments received since. Say whether it includes any interest that has not already been added to the debt.
- How and when the debt arose. A brief description of why the money is owed and when: unpaid invoices, goods supplied, services rendered, loan, rent, damages, etc.
- Details of any security held. If the creditor holds security over company assets (such as a charge or lien), give the date it was given and the value you put on it. Give details of any retention of title over the goods the debt relates to.
- Details of the supporting documents. Identify the invoices, statements, contracts, delivery notes, correspondence, court judgments or other documents that show the debt is owed. You only have to send them if the liquidator asks, but attaching them with the proof speeds up adjudication.
- A date and signature. The proof must be dated and signed (authenticated) by the creditor or someone authorised on the creditor’s behalf. If someone else signs, give their name, postal address and authority.
- Obtain the proof of debt form from the liquidator
- Enter the debt amount at the date of the winding-up resolution or order, not the current balance
- State the basis of the claim clearly: unpaid invoices, loan, rent, goods supplied
- Disclose any security you hold over company assets and any retention of title over the goods
- Attach supporting evidence: invoices, contracts, delivery notes, statements, correspondence
- Date and sign the proof and return it to the liquidator before the deadline
How the Liquidator Adjudicates Your Proof of Debt
The liquidator reviews every proof of debt before allowing the creditor to vote or receive a dividend.
Adjudication is not a rubber stamp. The liquidator checks the amount against the company’s own records (purchase ledger, bank statements, contracts), verifies the supporting evidence, and may reduce or reject the proof if the amount is disputed, unsupported, or includes items that are not legally provable.
Common reasons for reduction or rejection include: claiming interest that is not legally due, including VAT that was not charged on the original invoice, claiming consequential losses that are not provable in a liquidation (lost profits, future business opportunities), and filing a proof for a debt that the company disputes.
If a proof is rejected in whole or in part, the liquidator must write with the reasons. The creditor then has 21 days from receiving that statement to apply to the court under Rule 14.8 of the Insolvency (England and Wales) Rules 2016.
Key Takeaway
If your proof of debt is rejected, you have 21 days to appeal to the court under Rule 14.8 of the Insolvency (England and Wales) Rules 2016. Miss that window and the rejection stands. If you receive a rejection notice, take advice immediately. Do not let the deadline pass while you consider your position.
What Evidence to Attach to Your Proof of Debt
The stronger your evidence, the smoother the adjudication. Attach:
- Copies of unpaid invoices (not just a statement summary)
- The original contract or purchase order, if available
- Delivery notes or proof of service
- Any correspondence acknowledging the debt (emails from the company confirming the balance)
- Court judgments, if you obtained one before the liquidation
- Statement of account showing the running balance
Do not attach voluminous paperwork that is not directly relevant. The liquidator is adjudicating hundreds of proofs across multiple cases. A clean proof with clear invoices and a simple statement is processed faster than a box file of every email ever sent to the company.
Voting Rights and Why Your Proof of Debt Matters Beyond Dividends
Filing a proof of debt is not just about getting paid.
It also gives you the right to vote at the creditors’ decision procedure, which determines who is appointed as liquidator and how the case is run. Voting is by value of debt, not by number of creditors. If you are owed a significant amount, your vote carries weight. See our guide on creditor meetings in liquidation for how voting works in practice.
You can also use your standing as a proved creditor to request information from the liquidator, attend creditors’ meetings, join the liquidation committee (if one is formed), and challenge the liquidator’s fees or decisions. Without a proof, you cannot vote or sit on the committee, and your other rights are harder to use. See our guide on challenging a liquidator’s fees for the specific process.
Common Mistakes Creditors Make Proving Debt in Liquidation
Filing for the wrong amount. The provable amount is the debt at the date of liquidation, not the current balance including post-liquidation interest or penalties. Over-claiming leads to rejection or reduction.
Not filing at all. Some creditors assume the liquidator will contact them. The liquidator sends a notice, but it is the creditor’s responsibility to file. If you do not file, you will usually get nothing. Only a small debt of £1,000 or less can be treated as proved without one.
Filing late. The liquidator can still deal with a late proof but does not have to. If they admit it, you cannot disturb a dividend already declared, and you catch up on it only if there is money for a later dividend. File within the deadline the liquidator sets.
Including disputed amounts without explanation. If part of the debt is disputed by the company, note the dispute in your proof and explain your position. The liquidator will adjudicate, but a bare claim with no acknowledgement of the dispute looks sloppy and may be rejected.
Not disclosing retention of title. If you have an RoT clause, you should be claiming the goods back, not proving for the debt. Filing a proof of debt when you could be reclaiming stock is a strategic error. See our guide on company vehicles and equipment in liquidation for how RoT works.
Risk Warning
Missing the liquidator’s last date for proving means you cannot disturb a dividend already declared. You catch up on it only if there is money for a later dividend.
A late proof is paid any missed dividend out of later funds before other creditors are paid again, but there may be no later funds. Under Rule 14.38 of the Insolvency (England and Wales) Rules 2016, a creditor who has not proved by the last date for proving receives nothing from a final dividend. File as early as possible once you receive notice of the liquidation.
FAQs on How to Prove Your Debt in Company Liquidation
Do I have to file a proof of debt to get paid?
Yes, in almost every case. Without a proof of debt you will receive no dividend. The only exception is a small debt of £1,000 or less, which the liquidator can treat as proved. The liquidator will send you a notice and a blank form, but it is your responsibility to complete and return it with supporting evidence.
What if the company disputes the debt?
File your proof anyway and explain the basis of your claim clearly. The liquidator will adjudicate, which means they will review both sides and decide whether the debt is provable. If the liquidator is not satisfied the debt is owed, they may reject the proof in whole or in part, and you can apply to the court within 21 days of receiving their reasons.
Can I claim interest on the debt?
Yes, for the period up to the date of liquidation, if interest was agreed in the contract. Statutory interest under the Late Payment of Commercial Debts Act 1998 can also be claimed if it was accruing before the liquidation date.
Even without either, you can claim interest if the debt was payable at a fixed time under a written agreement, or if you made a written demand before the liquidation saying interest would be charged. That interest runs at the Judgments Act rate, from the due date or the date of the demand.
Interest for the period after the liquidation is only paid if there is money left once all proved debts have been paid in full, which is rare outside a solvent liquidation.
How much will I actually recover?
In the average insolvent liquidation, unsecured creditors recover between 0p and 20p in the pound. Many receive nothing at all after the liquidator’s fees, preferential claims, and any secured creditors are paid. The exact figure depends on the company’s assets and the total claims against the estate.
Can I file a proof late?
Yes, but you cannot disturb a dividend declared before your proof was filed. You are paid that missed dividend out of any later funds before other creditors receive more, but there may be no later funds. File as early as possible to protect your position.
