Solvency - Annulling Bankruptcy. 

We can assist in Annulling Bankruptcy, SAS Solvency can help preserve your Personal Interests and Assets.

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Section 73 Compositions
We can assist a bankrupt put a proposal to his or her creditors pursuant to Section 73 of the Bankruptcy Act 1966 {Cth) (“Section 73 Proposal”) and have the bankruptcy annulled.

 

The proposal will generally result in creditors receiving a greater return on their debts by accepting the section 73 as opposed to receiving very little f the bankrupt’s bankruptcy continued.

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A Section 73 Proposal is a complex proposal and involves the following:

• A proposed lump sum amount by a relative or associate of the bankrupt; and/or

• Payment of amounts over time by prescribed instalments by the proposer; and supported by;.

• Certain creditors associated with the bankrupt agreeing not to claim for a dividend if the proposal is accepted.

The registered Bankruptcy Trustee’s remuneration and expenses associated with reporting on the bankrupt’s Section 73 Proposal and for convening and holding a meeting of the bankrupt’s creditors to consider the proposal, must either be addressed by the bankrupt or included in the proposal.

 

It is generally accepted that the registered trustee is remunerated prior to the proposal being put to creditors At the meeting of creditors, for the Section 73 Proposal to be accepted, it must be approved by a special resolution of creditors.

 

It must be approved by a majority in number and more than 75% of the value of creditors voting at the meeting. If the proposal is accepted the bankruptcy is immediately annulled, however, if the proposal is not accepted by special resolution then the bankruptcy will continue.

 

If the Section 73 Proposal is accepted a trustee will administer the composition or scheme of arrangement under the proposal, collect any funds payable as a result of the proposal and distribute funds received in accordance with the provisions of

 

The Bankruptcy Act 1966 (Cth) including paying a dividend to the bankrupt’s creditors. Once the terms of the Section 73 Proposal have been fully complied with and all funds disbursed the trustee will finalise the administration of the composition or scheme of arrangement under the proposal and will notify the Australian Financial Security Authority that matter has been finalised.

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Effects of Acceptance of Section 73 Proposal

Your bankruptcy will end upon the acceptance of the Section 73 Proposal by creditors. This can mean:

• Your income will no longer be subject to assessment by your Bankruptcy Trustee.

• You will be allowed to travel without the restrictions commonly associated with bankruptcy;

• You can be appointed a company director;

• You may be able to retain certain assets if the Section 73 Proposal provides for it; and

• You can obtain finance or credit easier and sometimes without the need to disclose the bankruptcy.

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Please Consider

While most bankruptcy restrictions will be lifted, there are a number of things to note with regard to a Section 73 Composition:

• Credit reporting agencies have their own discretion as to how it affects a credit rating;

• A record of bankruptcy will still remain on a Government Register; and

• There is no automatic discharge of debts owed under the bankruptcy. That is, if the Section 73 Proposal and the resulting agreement are not carefully drawn up, creditors may still pursue their debt once the bankruptcy has been finished. As such, any proposal and the resulting agreement must be drawn up with professional advice and by experts. This is where our decades of collective experience dealing with bankruptcy Trustees can help you.

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