Bankruptcy – Section 73 proposals
During the course of bankruptcy, a bankrupt may be in a position to make a proposal to their creditors to satisfy their debts and consequently end their bankruptcy. Section 73 of the Bankruptcy Act provides a bankrupt with the mechanism to make that proposal.
If accepted, the creditors would expect to receive a greater distribution than they would receive under the continued bankruptcy and the bankrupt would be released from the restrictions of bankruptcy.
Bankrupts may make such a proposal by sending a written proposal to their trustee requiring that a meeting of creditors be called to consider the proposal. The trustee will conduct any necessary investigations into the benefits of the proposal, issue a report and call a meeting for the creditors to vote on the acceptance or rejection of the proposal.
If the proposal is accepted, the bankruptcy will be annulled at the time of acceptance.
If you are a bankrupt or know someone that is a bankrupt that is interested in making a section 73 proposal, please contact our office and speak with one of our experienced practitioners.
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