Services / Bankruptcy and rehabilitation
Objecting to a proof of debt: fourteen days
Every baht another creditor is allowed is a share that leaves the rest. Reading other creditors' proofs is therefore not a matter of suspicion but work that bears directly on what one receives.
Who may object, and what silence produces
The first paragraph of section 106 of the Bankruptcy Act B.E. 2483 (1940) provides that where a creditor's proof of debt is not objected to by another creditor, by the debtor, or by another official receiver, the official receiver with authority considers it and may allow the claim, unless there is reasonable cause to order otherwise. Three parties may therefore object, and not objecting leads directly to allowance.
Where there is an objection, the receiver investigates
The second paragraph provides that where a proof is objected to, the official receiver investigates and then makes one of three orders: dismissing the proof, allowing it in full, or allowing it in part. Those are the whole range of outcomes at that stage, and a partial allowance is the common result where some items of the debt are less well documented than others.
The power to summon under section 105
Section 105 provides that in considering and ruling on a proof of debt, whether or not the debt is one under a judgment, the official receiver may summon creditors, the debtor or any person to be examined, to give statements, or to produce documents for checking. The phrase whether or not the debt is one under a judgment repays attention: a judgment already obtained does not put the debt beyond examination at this stage.
Fourteen days from learning of the order
The third paragraph provides that an interested person may file an objection with the court against the official receiver's order under either the first or the second paragraph, within fourteen days of learning of that order. The period runs from the day the order became known, which is a fact worth being able to evidence, and the fourteen days apply to orders made with and without an objection alike.
At court, and the same route in rehabilitation
The fourth paragraph allows the court to call for the file, to direct the official receiver to explain the points in issue as it thinks fit, and to hold such further inquiry as is necessary without delay. In rehabilitation, section 90/32 sets out the same structure: objection by another creditor, the debtor or the planner; the same three possible orders; and the same fourteen days to take the matter to court.
PREPARE
What to bring
- The proof of debt you intend to challenge
- The documents supporting that debt, so far as available
- The facts suggesting the debt is not as stated
- Any of the debtor's accounts and records bearing on it
- The date the official receiver's order became known
QUESTIONS
Questions this raises
That creditor already has a judgment. Can it still be challenged?
Section 105 uses the words whether or not the debt is one under a judgment, which shows that examination at the proof stage does not exempt judgment debts. What can actually be argued then depends on the facts of the particular case — the amount genuinely outstanding, payments made afterwards, or items duplicated in another creditor's proof.
I learned of the order late because I was not notified.
The third paragraph ties the fourteen days to the day the official receiver's order became known, not to the day it was made. When it became known is therefore material and worth being able to evidence — the date a letter arrived, the date the file was inspected, or correspondence showing when it first came to notice.
LAW
The legislation
- Bankruptcy Act B.E. 2483 (1940), section 105
- Bankruptcy Act B.E. 2483 (1940), section 106
- Bankruptcy Act B.E. 2483 (1940), section 90/32
ENQUIRIES
