Firms collapsed (Creditor Rights)

If you are a “Creditor”
If you or your business is owed money by a company or another business you are termed a “Creditor”.

Creditors have few rights when a business goes bust. They are generally the last people to hear that there is a problem and often end up being the last to be paid out. When a business collapses you will become an unsecured creditor in the bankruptcy or liquidation involved.

What about Debts Owing to Me?
From the date of someone's bankruptcy the court official appointed to administer the bankruptcy becomes responsible for most of the fallen person's or business's debts. You will have to submit claims in the bankruptcy for the amount owing to you. Only those debts known as provable debts will feature in the bankruptcy and will be paid out, as funds are available.

Your debt is frozen from the date of bankruptcy and you can no longer pursue the bankrupt person or business for the amounts owing.

The only creditors who have their own action are those who hold security over the bankrupt's assets. They will be entitled to sell the assets to repay their loan because of their security.

Once the bankrupt has been discharged from their bankruptcy they are released from all their provable debts and you as creditors can no longer pursue them for the old debts.

If you begin to pursue or hassle them they can pass the matter over to their insolvency officer to deal with. Creditors can claim any debts they believe are duly owing by filing a normal claim and there is a process to be followed.