7.—(1) Subject to paragraph (2) below, every creditor shall notify the Secretary of State of each of his debts or claims against the Council within three months of the dissolution date and shall give the Secretary of State such further information relating to the debt or claim as she may reasonably require.
(2) Paragraph (1) above shall not apply to any debt or claim which is the subject of any legal proceedings which have been commenced against the Council prior to the dissolution date.
(3) Every creditor shall state in the notification given to the Secretary of State in accordance with paragraph (1) above the amount of the debt or claim or, where the debt or claim is subject to a contingency or is a claim for damages or bears no specific value, shall include in it as far as possible a just estimate of the debt or claim.
(4) The Secretary of State may admit or reject each debt or claim notified to her in accordance with paragraph (1) above and shall notify the creditor in writing whether she admits or rejects it in whole or in part and, if she rejects it, shall state in the notification the grounds of the rejection.