When persons ask to be recognized as creditors of an insolvent company, they have to provide proof that the company does, indeed, owe them money. People are asked to provide proof of debt so they can’t:
- Collect dividends they’re not entitled to
- Exercise voting rights at creditors meetings they’re not entitled to
When people provide proof of debt, they have to fill out an official form known as a ‘proof of debt form’ or just a ‘proof of debt’.