Section 73 of the Bankruptcy Act provides a bankrupt with the means to annul their bankruptcy should they have the money or provisions to satisfy the original debt agreement. A Section 73 proposal is a compromise on the original bankruptcy agreement in which the creditors should expect to receive more than if they continued with the bankruptcy.
BANKRUPTCY ACT 1966 – SECT 73
Composition or arrangement
(1) Where a bankrupt desires to make a proposal to his or her creditors for:
(a) a composition in satisfaction of his or her debts; or
(b) a scheme of arrangement of his or her affairs;
he or she may lodge with the trustee a proposal in writing signed by him or her setting out the terms of the proposed composition or scheme of arrangement and particulars of any sureties or securities forming part of the proposal.
The Benefits of Section 73 Proposal
A Section 73 proposal is a mutually beneficial agreement that allows the bankrupt to relieve themselves from the ongoing weight of financial debt sooner than if the bankruptcy was to continue. If you are a debtor you begin rebuilding your life and career without the consequences and restrictions of bankruptcy.
Creditors often receive a larger return or dividend faster than if the bankruptcy were to continue through an effective Section 73 proposal. The formal debt agreement is binding upon all parties which can result in the affairs of the bankruptcy much quicker and more affordably.
Constructing an effective Section 73 Proposal
With the right trustee and bankruptcy advisory service your Section 73 Proposal can be structured in which to give flexibility to you and your creditors. To learn of the options available to you during or before your bankruptcy speak to the professional team at Section 73 on 1300 60 70 60 – helping Australian businesses rebuild their futures with secure, simple and effective debt agreements.
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