Prouvable Claim/Proof of Claim

A provable claim (or proof of claim) in the context of a consumer proposal or bankruptcy is a debt that is accepted by the licensed insolvency trustee and allows the creditor to participate in the distribution of dividends.

It represents an amount owed to creditors, such as loans, advances, or unpaid wages, by the debtor before they filed a consumer proposal or bankruptcy. Generally, these claims are classified into 3 different categories.

The 3 categories of claims

  • Secured claims: Secured claims are debts that have security attached to them (such as a mortgage, conditional sales contract, or lease).
  • Unsecured claims: Unsecured claims are those that do not have specific security attached.
  • Preferred claims: Preferred claims are certain debts – such as child support and employee wages – that are treated with priority over other forms of debt to ensure they are repaid before other funds can be distributed.

For a creditor’s claim against the debtor to be considered provable, it must meet certain criteria established by the Bankruptcy and Insolvency Act and confirmed by the licensed insolvency trustee. The creditor must demonstrate that the debt was legitimately incurred and with a reasonable expectation of repayment, that it is prior to the date of the consumer proposal or bankruptcy, that the exact amount claimed is accurate, and that the debt has not been previously discharged.