Bankruptcy Anullment

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Bankruptcy Anullment

A composition or scheme of arrangement can only be proposed by a bankrupt.

A composition or arrangement is an offer made by a bankrupt through the trustee to finalise his or her debts.

The trustee will prepare a report about the bankrupt’s proposal and advise creditors whether the proposal will benefit them.

A meeting is then held where creditors can vote on whether or not to accept the offer.

Bankruptcy Annulment
Australian Money

Fortunately there are provisions within the Bankruptcy Act that enable a bankrupt to have their bankruptcy annulled through a Section 73 proposal.

Rather than following the natural course of bankruptcy over 3 years or more, a Section 73 proposal is an approach where if the majority of creditors (in number) & 75% (in dollar value) of those creditors vote to support a resolution, a bankruptcy can be annulled.

Annulment of bankruptcy through the provisions of Section 73, has the same effect as if the bankruptcy had never occurred.