Bankruptcy is a very emotional and stressful situation, but are there any ways to get out of it early? Here are three possible ways.
- Put forward a formal proposal
Section 73 of the Bankruptcy Act outlines the steps to follow if you want to put a proposal to your creditors to end your bankruptcy early. If you wish for your bankruptcy to end early, you will need to put a proposal forward to your creditors, and it should offer them more than what they’d receive, had your bankruptcy continued for the full time period. It is important for you to offer more than the value of the assets that your Bankruptcy Trustee will realise during your bankruptcy. This is because it provides your creditors an incentive to accept your proposal.
Once you have established this, you will need to outline the details of your proposal in writing to your Bankruptcy Trustee. It will need to include how you plan to fund your proposal, as your own assets will have already vested with your trustee. A report will then be prepared and presented to your creditors by the Trustee with their recommendation of what steps to take. For your proposal to be accepted, you will need to pass a certain voting threshold. The voting threshold is more than 75% of the value of creditors who vote and more than 50% in number of creditors who vote. This vote will be conducted by your Bankruptcy Trustee at a meeting of creditors. If you receive enough positive votes, your bankruptcy will end immediately.
- Court Application
You may be able to apply annul your bankruptcy through the court. However, it is recommended that you obtain legal advice first, to determine whether or not you have grounds for such an application.
- Payment of your debts in full
In an ideal world, this seems like the most attractive option. Payment of your debts in full may be possible if you win the lottery or inherit enough money to pay off all your debts. Alternatively, a family member or close friend may also provide the required funds for you.
It is always best to gain professional advice in order to understand how bankruptcy will impact your personal circumstances. If you are looking for a trusted Bankruptcy Trustee, then get in contact with us at Australian Bankruptcy Services. We are all fully licensed and qualified in order to help you file for Bankruptcy and provide expert advice. Call our bankruptcy toll-free hotline – 1800 462 767, 24 hours a day 7 days a week.