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Section 73 Proposals: How can my bankruptcy lawyer end my bankruptcy early?

Do you want to make a proposal to your creditors to satisfy your debts and end your bankruptcy early? If so, read on.

For most people, bankruptcy ends on the discharge of the bankrupt three years after the statement of affairs was filed. However, during your bankruptcy you may find yourself in a position to make a proposal to your creditors to satisfy your debts and consequently, end your bankruptcy early. The proposal is made by your bankruptcy solicitors pursuant to Section 73 of the Bankruptcy Act 1966 (Cth).

Such a proposal must be made with funds and assets that wouldn’t otherwise be available to creditors under the bankruptcy. Most frequently, funds are borrowed from friends or family. You will have to disclose to your bankruptcy trustee the source of the funds. They may also ask for you to provide evidence that the funds are actually from the source you claim.

The proposal must be sent in writing to the bankruptcy trustee and must allow for payment of the trustee’s fees and expenses (presently 20% of the composition funds plus the cost of the creditors meeting) and payment of the realisations charge (presently 7%). A lump sum as opposed to “x” cents in the dollar should be offered as creditors’ claims may vary from what you believe is owed.

When considering the quantum of your offer, you must consider whether the creditors will receive a larger distribution under your offer when compared to the continued bankruptcy. Creditors tend to look favourably upon these offers. Prior to making a proposal to your bankruptcy trustee, you and your bankruptcy lawyers should enquire with your creditors as to whether they would be willing to accept your offer.

The trustee will then prepare its report about your offer to creditors and hold a meeting of creditors. For your proposal to be accepted, a special resolution of creditors must be reached meaning the majority in number of creditors and 75 of the dollar value must vote in favour of your offer.

If your Section 73 proposal is accepted, your bankruptcy is annulled and you will be released from all your debts except those debts which you would not have been released from had the bankruptcy run its normal course. If you fail to comply with the terms of the proposal, you can be made bankrupt again by the Court.

If it is rejected, the bankruptcy will continue as if the proposal had never been put to creditors. You and your bankruptcy solicitors may also consider making a further offer if your offer is rejected by your creditors.

If you are currently an undischarged bankrupt and are considering making a Section 73 proposal, Butler McDermott’s Nambour bankruptcy lawyers in Sunshine Coast can assist. Please contact our Nambour legal team to discuss bankruptcy legal advice.

This bankruptcy law article is not intended to advise you in relation to your specific circumstances and should be used as a general guide only. For bankruptcy legal advice contact our bankruptcy lawyers in Sunshine Coast at Butler McDermott law firm Nambour.


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Simone Faunt


Peter Boyce


Peter has been practising as a Nambour Solicitor since 1977 and joined Butler McDermott Lawyers the same year.

With over 40 years practicing as a Sunshine Coast lawyer, Peter has extensive knowledge of various facets of law.

He has practised in all areas of litigation and has special interests in:

  • Criminal law
  • Civil and Commercial litigation
  • Retirement Village matters
  • Sports law
  • Resumption of land and compensation claims


Peter has specialised knowledge of and experience with resumption matters as a result of the Traveston Dam project, road corridors, Main Roads and water pipeline. He is renowned for his professional approach and is an experienced and determined advocate.

Brent King


Brent works as a litigation lawyer, providing litigation legal advice in relation to both civil and criminal law matters, including:
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  • Contract and Debt Disputes
  • Building and Construction Disputes
  • Planning Matters
  • Criminal Law and Traffic Legal Matters
Having grown up on the Sunshine Coast and joining Butler McDermott after the completion of his studies, Brent appreciates the needs of our clients, and brings a particularly commercial approach to litigation. Brent is a member of the Queensland Law Society and the Sunshine Coast Law Association, and has litigated a wide variety of matters in the Magistrates, District and Supreme Courts.

Al Upton


After arriving at Butler McDermott Lawyers in 2016, Al quickly progressed to running our Wills and Estates section and has successfully litigated disputes in the Supreme and District Courts of Queensland in the early stages of his career.

In the years that followed Al has now moved to assist our clients with commercial and property matters having achieved positive outcomes in that area as well as general litigation. Al’s experience has him uniquely placed to provide quality advice in the areas of property, commercial, wills and estates and general litigation.

Al is involved in giving back to the community, sitting on the board for the Daniel Morcombe Foundation and Sundale Community Foundation. He otherwise became a director of Butler McDermott Lawyers in November 2021.