How Does A Section 73 Proposal Work?

If you are considering a Section 73 Proposal then you need to know why it is and how it works!

1. A composition or arrangement offer is made to bankrupts through their trustees to finalise their debts. Creditors vote on whether or not to accept such offers.
2. Such offers must benefit a creditor that would not otherwise be available. All creditors will receive an equal rate of dividend.
3. The offer must be in writing and signed and lodged with the trustee.
4. A creditors meeting is called to formally consider the offer.
5. The trustee may require a deposit to cover the expenses and fees of the meeting.
6. At the creditors meeting, the creditors will vote on your offer.
7. A trustee must report to creditors on whether they will benefit if the offer is accepted.
8. The Creditors may accept the offer when a ‘yes’ vote from a majority of voting creditors as long as they represent at least 75% of the claims in dollar value is achieved.
9. Your bankruptcy will be annulled immediately.
10. If your offer is rejected, your bankruptcy will continue.
11. Creditors may vary the composition of arrangement.

For more help and assistance on Section 73 Proposals consult the Insolvency Professionals.