Technical Bite: What are the main provisions affecting creditors in the new rules?

Here we provide a brief summary on what creditors need to know about the new procedures.

  1. Meetings of creditors have been abolished unless creditors request that a physical meeting be summoned.
  2. Many decisions during the life of an insolvency process will be made by deemed consent (e.g. if there are no objections the decision is deemed to have been accepted) and may take place either by correspondence, electronic voting or virtual meetings – the procedure to be adopted being at the discretion of the appointed Insolvency Practitioner.
  3. In order to vote creditors must have submitted a proof of their claim.
  4. If a creditor is owed less than £1,000 the Insolvency Practitioner may decide to accept their claim based on the information provided by the insolvent entity without requiring the creditor to submit a claim. If the creditor does not agree with the amount listed they should contact the IP and submit a proof of debt.
  5. If the creditor has customarily communicated with the insolvent by email then the same method of communication is likely to be adopted by the IP.
  6. Information supplied to the creditor will contain instructions as to how the creditor can engage with the process. Alternatively, the creditor may elect to opt out of communications however in any event if there is likely to be a dividend to creditors the IP must notify all creditors.
  7. There is likely to be greater use of websites and electronic communication in engaging with creditors.
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