Services / Bankruptcy and rehabilitation
Proving a debt in bankruptcy: the two months
This is the deadline that leaves a creditor with nothing even though the debt is real and fully documented, because it runs not from the day the creditor learns of the case but from the day of publication.
Two months from what
The first paragraph of section 91 of the Bankruptcy Act B.E. 2483 (1940) provides that a creditor wishing to prove in a bankruptcy, whether or not it was the petitioning creditor, must file with the official receiver within two months of the publication of the absolute receivership order. The clock therefore starts at publication, not when the creditor is told or comes to know.
Creditors outside the Kingdom
The closing words of the first paragraph allow the official receiver to extend the period by up to a further two months where the creditor is outside the Kingdom. It is a capped extension, not an open-ended indulgence, and it has to be sought rather than arriving automatically.
What the application must contain
The second paragraph requires the application to be made on the prescribed form, with a schedule setting out the particulars of the debt, a statement of the evidence supporting it, and of any property of the debtor held as security or in the creditor's possession, together with the documents relating to the debt claimed. A creditor holding security must therefore disclose it in the application rather than keep it back.
What remains if the deadline is missed
The statute leaves a route open where the failure was due to circumstances beyond control, a narrow exception that must be proved rather than a general answer to not having followed the news. Watching for notices concerning debtors at risk is therefore far better value than looking for a remedy afterwards, particularly where a debtor is already showing signs of trouble.
Filing is not the end of it
After filing, the official receiver investigates and makes an order on the application, and other creditors or the debtor may dispute it. The documents attached at the outset therefore carry great weight, because they are what answers those objections at the investigation stage. A thin filing with incomplete documents usually ends with part of the claim struck out.
PREPARE
What to bring
- The contracts and everything evidencing the debt
- A statement separating principal from interest to the relevant date
- Documents for any security held
- Any judgment or court order relating to the debt
- The date the absolute receivership order was published
QUESTIONS
Questions this raises
I only just learnt of the receivership and the two months have passed.
Section 91 runs the two months from publication of the absolute receivership order, not from the creditor's knowledge, so not knowing is not by itself a ground for more time. The statute leaves a route open only where the failure was due to circumstances beyond control, an exception that has to be proved, so the facts are worth examining without further delay.
I hold security. Do I still need to file a proof of debt?
A secured creditor has options with different consequences, and the second paragraph of section 91 requires any property of the debtor held as security or in the creditor's possession to be stated in the application. The choice of route is therefore best made before the two months expire, not after.
LAW
The legislation
- Bankruptcy Act B.E. 2483 (1940), section 91
ENQUIRIES
