Section 153A of the Bankruptcy Act 1966 provides for an annulment of bankruptcy when paying creditors in full. Section 73 / 74 of the Bankruptcy Act 1966 is annulment by way of proposal offering less than payment in full. It is a formal agreement between a bankrupt, their creditors and a person that administers/monitors the arrangement (ie., a registered Trustee) that allows the bankrupt to satisfy their debts and have their bankruptcy annulled.
A Section 73 Proposal may be in the form of a Composition or a Scheme of Arrangement and allows for a third party (eg., relative, spouse, etc) to put forward an amount of money, say 10 or 20 cents in the dollar, as full and final payment to all creditors – payments of same can include a lump sum payment or periodical payments over a specified timeframe. The proposal is presented via the Trustee and voted on at a meeting of creditors, convened specifically to consider the offer.
Frequently Asked Questions on a Section73
Who can apply for a Section73?
Any individual who is a current bankrupt is entitled to submit a Section 73 Proposal.
How much do I offer the creditors?
This will depend on a number of varying factors.
When can I apply for a Section 73?
There are no restrictions as to when you can apply for a Section 73 annulment.
What are the advantages of a Section 73 Proposal?
The term of bankruptcy is for three years, by offering a Section 73 proposal you are paying more to the creditors than what they would otherwise receive in your bankruptcy
You can travel freely
Your credit file is improved
If so inclined you can become a director of a company again