Posted by Bishop Fleming on June 28, 2017
Commentary number 2: a creditor’s ability to opt out. Welcome.
Today is all about exploring the invitation now extended to creditors to opt out of receiving further communications in an insolvency process.
The mechanics of doing so, are, as may be expected, quite simple.
In order to opt out of receiving further documents, requests must be made in writing to the appointed Insolvency Practitioner.
The request will need to be signed and dated and the signatory will need to be the creditor. If the creditor is a company the signatory must be someone entitled to sign on that company’s behalf.
On receipt of the request by the Insolvency Practitioner the creditor will have successfully become an opted out creditor, many congratulations.
So what happens if there is a change of heart? Well, fear not, the mechanics of opting in are just as simple.
A creditor may at any time revoke their election to opt out by repeating the procedure just discussed but this time by tailoring the request to opt in.
Now, the answer to the question why opt out, ultimately comes down to how actively a creditor wants to participate in the insolvency process.
Opting out will not affect a creditors entitlement to receive a dividend, in circumstances where a dividend is to be paid.
But, although a creditor who has opted out is entitled to participate in the making of decisions in relation an insolvency process, by opting out that creditor will not be given any notice of decisions being sought.
Further, whilst creditors have the right to elect to opt out of receiving further documents about an insolvency, please be aware that there are some circumstances where creditors will continue to receive documents.
These documents include:
So in summary:
Please. Join me next time for Commentary Number 3: Claiming as a Creditor (the small debt).