Section 73 Administration Brief Summary

WHAT'S THE CAUSE?

  • Occurs after Bankruptcy has taken place.
  • A bankrupt enters a formal, binding arrangement with creditors.
  • The arrangement is flexible and the terms may be negotiated between the individual and creditors.
  • A Registered Trustee administers the arrangement and pays the dividend to creditors.
  • The bankruptcy is annulled and the individual is released from debts.

WHAT'S IT ABOUT?

  • The bankrupt wishes to shorten and annul bankruptcy.
  • The bankrupt has access to funds, which are not recoverable in bankruptcy, and the funds can be used to pay to creditors.
  • Individual can also access funds from third parties to pay creditors.

WHAT IT DOES!

For Individual

  • Bankruptcy is annulled.
  • Formal arrangement binding upon all parties.
  • The stigma and restrictions of continuing bankruptcy are avoided.
  • Provide relief from debt problems and extinguish existing debts.
  • Arrangements are flexible.
  • A bankrupt can act as a director or take part in the management of a company after the Proposal is accepted by creditors.

For Creditor

  • The arrangement is binding upon all parties.
  • Usually makes assets available to creditors which would not be received under bankruptcy.
    Uncertainty is crystallised.
  • Often provides a higher and quicker dividend than under bankruptcy.
  • Arrangements are flexible.
  • The arrangement is generally finalised sooner and is less costly than bankruptcy.
  • Individual can be made bankrupt again if default occurs under Proposal.