The Compendium

Non-Provable Debts

Non-provable debts are those which are not extinguished by the discharge of Bankruptcy proceedings.

They are ‘not provable’, so the creditor can still take action to recover the debts during and after the end of the Bankruptcy.

In a Bankruptcy there are a number of debts which cannot be proved at all, and therefore cannot be written off when the Bankrupt is discharged. These debts are:

• Order for Drug Trafficking Offences;
• Order under Proceeds of Crime Act;
• Order under the Criminal Justice Act;
• A fine imposed for an offence;
• Periodic matrimonial assessment payments;
• Costs under a matrimonial order;
• Liability under the Child Support Act;
• Double proofs – those that are claimed twice; for example, if a creditor has received a payment from insurers for their claim, they cannot claim again in the Bankruptcy. They would be paid twice;
• Secured debt;
• Student Loans;
• Foreign Tax: for example, taxes owed in a country which has not signed up
to UNCITRAL, and so cannot be joined in an insolvency action under Cross Border Proceedings

[See ‘Bankruptcy’, ‘Discharge’, ‘Provable Debts’, ‘Double Proofs’, ‘UNCITRAL’ and ‘Cross Border Proceedings’.]

Notice to Elect In a Liquidation and Bankruptcy the officeholder has the right to disclaim property which may give rise to a liability, or is in some way ‘onerous’. (See ‘Disclaimer’.) The officeholder may not know initially whether they want to exercise this right, as it will have repercussions on the extent of the insolvent estate and potentially how much can be returned to creditors.

If they delay the decision to disclaim the landlord, for example, can issue a ‘Notice to Elect’. A person who has an interest in the property has a right to apply in