Andrew Wily - Bankruptcy in Australia Part 3 – How to end your Bankruptcy?

Bankruptcy in Australia can be an attractive and viable option for some people wanting to settle their outstanding credit problems.  This article looks at how quickly a bankrupt can terminate or annul their bankruptcy and what can be done, if anything, about their poor credit rating. 

How to terminate my bankruptcy?

Bankruptcy in Australia lasts three years starting from the date you filed a Statement of Affairs. The Trustee may extend this period to five or eight years if you fail to fulfil your obligations during bankruptcy.

Can my bankruptcy be annulled during the three years of bankruptcy?

Yes, Section 153A of the Bankruptcy Act of 1966 allows you to annul your bankruptcy at any time during the three year period as long as your debts are paid in full.

Under Section 73 of the Bankruptcy Act of 1966, a bankrupt may make an offer of a composition or enter into a scheme of arrangement with creditors to settle the debts. You must offer monies that are not available to creditors, such as money offered by a relative or income that is not under any contribution assessment liability.

The Trustee convenes the creditors or the creditors’ representatives for a special meeting to vote on your offer of composition. You will be asked to attend the meeting and speak to your creditors. If at least 75% in value and 50% in number of all creditors represented in the meeting accept your offer, a special resolution is passed to annul your bankruptcy. If the offer is rejected, the monies are refunded.

Creditors either attend a meeting convened by the Trustee, appoint another person to attend on their behalf as their proxy vote on whether to accept or reject the offer of composition or send a Assent/Dissent form indicating whether they vote for or against the proposal. The bankrupt receives an annulment upon the special resolution being passed, accepting the proposal.

For more information on what happens on becoming bankrupt? orwhat happens once bankrupt?.

We hope this article has answered some of your questions on how you can terminate or annul your Bankruptcy in Australia or you can contact us directly via e-mail or through our Insolvency InfoLine 1800 802 702 for a FREE consultation.

The information in this article was correct at the date of posting and should be relied upon as a guide only.  We urge you to always seek professional advice before taking any further action.