Compositions

There are ways a bankrupt may be able to annul their bankruptcy by satisfying creditor debts pursuant to a proposal as per Section 73 of the Bankruptcy Act 1966 (Cth). These are known as compositions. Generally, an accepted proposal will result in creditors receiving a return on their debts which is higher than they would have received if the bankrupt’s bankruptcy continued.

The most common forms of Section 73 proposals include:

• A lump sum payment made by a relative or associate of the bankrupt,
• Agreed instalments by the bankrupt over time,
• Certain creditors associated with the bankrupt agreeing to not claim for a dividend of the agreed proposal;
• Or any combination of the above.

G T Lean & Associates CPA can assist in preparing a composition proposal for an existing bankrupt estate that has been administered by us or another party.

For more information on preparing a proposal or to arrange a meeting contact us on (08) 9227 8353