Form 31 Proof of Claim is a vital document in bankruptcy proceedings in Canada. It’s an essential tool for creditors to stake their claim in a debtor’s bankruptcy estate. This guide provides a detailed overview of Form 31, its purpose, and how to accurately complete it.
Understanding Form 31 Proof of Claim
The Form 31 Proof of Claim is a document that creditors must fill out during bankruptcy procedures. It serves as an official declaration of the amount a debtor owes a creditor at the time of insolvency. It is a crucial part of the bankruptcy process, and its correct completion is vital for the creditors to recover their funds.
The term “Form 31” is derived from the form number assigned to the Proof of Claim form under the Canadian Bankruptcy and Insolvency Act (BIA).
The Purpose of Form 31 Proof of Claim
Utilizing Form 31 is the second step in bankruptcy proceedings. It allows the Licensed Insolvency Trustee (LIT), who previously functioned as a bankruptcy trustee, to compare the debt stated on the debtor’s Statement of Affairs with the claims made by each creditor.
Why Complete Form 31 Proof of Claim?
Completing and filing Form 31 Proof of Claim is vital for creditors for several reasons:
Recovery of Debt: By properly completing Form 31, creditors increase their chances of recovering their owed amount from the bankruptcy estate.
Active Participation: Once a claim is filed and accepted, the creditor becomes an interested party in the bankruptcy case and can participate in and vote at the creditors’ meeting.
Claim Verification: The Trustee uses Form 31 to validate each creditor’s claim, ensuring that the claim is accurate and up-to-date.
Key Components of Form 31 Proof of Claim
Form 31 Proof of Claim contains several sections that creditors must fill out accurately. Let’s examine each section in detail:
Creditor’s Information: This includes the creditor’s name, address, and contact details.
Debtor’s Information: This contains the debtor’s name and the nature of the bankruptcy (like proposal or receivership).
Claim Certification: Here, the creditor or their representative certifies the claim’s validity and provides details connected with the claim.
Type of Claim: The creditor specifies the claim’s nature, whether it’s an unsecured claim, secured claim, or a claim of lessor, wage earner, farmer, or director.
Declaration of Relationship: The creditor must declare if they are related to the debtor as per section 4 of the Act.
Details of Payments and Transfers: This section requires details of any payments received from the debtor, credits allowed, and transfers at an undervalue the creditor has been party to within three months before the initial bankruptcy event.
Additionally, Form 31 includes checkboxes to request a copy of the report filed by the Trustee and spaces for the signature of the creditor and a witness.
Filling Out Form 31 Proof of Claim
Correctly filling out Form 31 is critical to ensure the claim’s validity. However, it can be challenging for creditors due to its complexity. Trustees often provide instructions on completing the claim form and proxy. Below is a step-by-step guide on how to adequately fill out the Form 31 Proof of Claim:
Download the Form: Download Form 31 in your preferred format (PDF or Word) from the official website.
Fill out Creditor’s and Debtor’s Information: Begin by filling out your information as the creditor and the debtor’s details.
Certify the Claim: In the certification section, verify that you are a creditor of the debtor and have knowledge of all circumstances connected with the claim.
Specify the Type of Claim: Indicate the nature of your claim by checking the appropriate category.
Declare Relationship: State whether you are related to the debtor according to the Act’s definition.
Detail Payments and Transfers: List any payments you’ve received from the debtor and any credits you’ve allowed to the debtor or transfers at undervalue you’ve been involved in within the specified period.
Sign the form: Sign the form, provide your contact details, and have it witnessed.
The Importance of Accurate Filing
Filing the Form 31 Proof of Claim accurately is essential for several reasons:
Admittance of Claims: The Chair of the creditors meeting and the Trustee have the power to admit or disallow claims. An inaccurately completed form may lead to a claim being disallowed.
Penalties for False Claims: The BIA provides strict penalties for making any false claim, proof, declaration, or statement of account, reinforcing the importance of accurate filing.
Dividend Payments: Properly completed and filed claims are crucial for the Trustee to determine the valid claims for dividend payments from the liquidated bankruptcy estate.
Deadlines for Filing Form 31 Proof of Claim
The timing of filing the Form 31 Proof of Claim depends on the bankruptcy proceedings. There are two primary deadlines to keep in mind:
Before the First Meeting of Creditors: If you wish to participate and vote at the meeting, you must file a properly completed valid claim before the meeting starts.
Before Dividend Distribution: If the Trustee is preparing to distribute dividends and you haven’t filed your claim yet, the Trustee will send a notice in writing stating that a dividend will be paid. You must file your claim before the specified date to be eligible for any payment.
Disputing a Form 31 Proof of Claim
If you are a creditor with a proven claim and believe another claim is invalid, you have the right to inspect the claims filed and object to any claim. You should communicate your concerns to the Trustee who will then decide whether to admit or disallow the specific claim.
Conclusion
Form 31 Proof of Claim plays a vital role in bankruptcy proceedings. It’s the channel through which creditors can establish their claim against the debtor’s bankruptcy estate. Accuracy and timely submission of this form are paramount to ensure a valid claim, participation in creditors’ meetings, and a fair share in the dividend distribution.
Need help navigating the complexities of a Form 31 Proof of Claim? Consider consulting with a professional trustee. The right guidance can streamline your claim process, ensuring you recover your funds swiftly and efficiently.
