Creditor’s claim in insolvency proceedings
Why file a creditor’s claim?
A creditor’s claim is a document that every creditor must prepare and submit to the relevant insolvency administrator if a person wants to receive at least partial satisfaction of his claim and exercise other creditor rights within the insolvency proceedings.
It is important to remember that although in everyday life the term creditor means any person who has a claim against the debtor, in the framework of insolvency proceedings only the person whose right of claim has been duly recognized in the particular insolvency proceedings is considered to be a creditor. Namely, the creditor acquires his status in the insolvency process only when the insolvency administrator, based on the received creditor’s claim, has made a relevant decision to recognize this claim. Thus, despite the fact that the creditor has a claim against the particular debtor, the creditor will have the right to receive money to satisfy his claim in the insolvency process, as well as the right to participate in the insolvency process (receive and request information, participate in creditors’ meetings, submit complaints about the administrator’s actions, etc.) only after he has submitted a justified creditor’s claim to the insolvency administrator.
What should be stated in the creditor’s claim?
In order for the creditor’s claim to be recognized as justified, it must meet all the requirements set forth in the Insolvency Law. In the creditor’s claim, all the information specified in the fourth part of Article 73 of the Insolvency Law must be specified. Namely, the creditor’s claim must state:
- the grounds for the claim – all the circumstances that confirm that the creditor has the right of claim against the insolvent debtor;
- the type of claim – whether the claim is secured (by pledge or mortgage) or unsecured;
- the amount of the claim, separately referring to the amount of the main claim and the amount of the ancillary claim (interest, contractual penalty, etc.);
- the time the claim arose – the time when the debtor became obligated to pay the debt to the creditor;
- whether the creditor is recognised as an interested person within the meaning of Section 72 or 131 of the Insolvency Law – whether the creditor is or has been during the last five years:
- a member, shareholder, member of a partnership, member of an administrative body of the debtor – a legal entity,
- the procurator and person with a commercial power of attorney of the debtor – a legal entity,
- the person who is married to or is in relation or affinity to the second degree with the founder, participant (shareholder) of the debtor – a legal entity – or member of a partnership or member of an administrative body,
- in one group of companies with the debtor – a legal entity,
- spouse of the debtor – a natural person,
- a person who is in relation or affinity to the debtor – a natural person – to the second degree,
- the guardian or trustee of the debtor – a natural person,
- a commercial company in which the debtor – a natural person – has a decisive influence within the meaning of the Group of Companies Law.
- whether the creditor is recognised as a creditor whose right to claim against the debtor depends on the occurrence of an event (which may or may not occur) – if the right of claim depends on a condition, the claim amount and the date (if any) by which the condition should materialise must also be indicated;
- the contact information – address and electronic mail address, phone number is also recommended;
- the bank account number – account number to which the creditor wants to receive satisfaction of his claim.
In addition to the information to be indicated in the creditor’s claim, in accordance with Article 73, part six of the Insolvency Law, substantiating documents shall be appended to the creditor’s claim. These are documents that confirm the creditor’s right to claim against the debtor, and from which the insolvency administrator can obtain full justification for the existence of the specific claim. The scope and type of these documents are not specified anywhere, various court rulings, contracts, invoices, bills of lading, payment orders, etc. can serve as grounds for the claim.
What is the deadline for submitting a creditor’s claim?
The creditor may submit his claim to the debtor’s insolvency administrator within one month from the date on which the entry is made in the insolvency register regarding the declaration of insolvency proceedings. The exact application deadline can be found in the insolvency register. In case of missed deadline, the creditor may submit the claim within six months, but not later than until the day when the plan for settling the claims of creditors has been drawn up, which may also take place within a shorter period. It should be borne in mind that in this case the creditor will not be granted voting rights at the creditors’ meeting. After this deadline a limitation period sets in, thereby the creditor loses his creditor status and his right to claim against the debtor.
To whom and how is the creditor’s claim submitted?
The creditor’s claim must be submitted to the debtor’s insolvency administrator, not the debtor himself. The address of the administrator’s place of practice and the electronic mail address can be found in the insolvency register – https://maksatnespeja.ur.gov.lv/.
The creditor’s claim together with the substantiating documents can be submitted to the insolvency administrator in different ways:
- by sending it by mail to the address of the practice place registered by the administrator;
- by sending it electronically signed to the administrator’s electronic mail address;
- by sending it electronically signed to the administrator’s e-address;
- by submitting it electronically signed using the Electronic Insolvency Accounting System (EMUS) maintained by the Insolvency Control Service.