In-Bankruptcy Compositions
A Pathway to Early Discharge from Bankruptcy
An In-Bankruptcy Composition (also known as a Section 73 Proposal) is a formal arrangement made during bankruptcy that allows you to settle your debts early through an agreed offer to creditors.
If accepted, your bankruptcy is annulled, ending your obligations and giving you a clean financial slate.
At Equinox Restructuring & Insolvency, we assist individuals who are currently bankrupt in preparing and negotiating compositions that provide fair returns to creditors and a faster return to financial normality.
What Is a Section 73 Composition?
A Section 73 Composition is a proposal made by a bankrupt individual to their creditors to:
Pay a lump sum
Offer a payment plan
Provide other benefits
If accepted by the required majority of creditors, the bankruptcy is annulled and the composition terms replace your bankruptcy obligations.
When Should You Consider an In-Bankruptcy Composition?
You may consider a Section 73 Composition if:
- Your financial circumstances improve during bankruptcy
- A third party (e.g. family member or business associate) can help fund a lump sum offer
- You want to exit bankruptcy early to restore creditworthiness or professional standing
- You wish to regain control of your financial affairs sooner
Benefits of a Section 73 Proposal
- Early release from bankruptcy
- Avoids the full 3 year bankruptcy period
- Helps restore personal and professional reputation
- May offer creditors a better return than waiting for asset realisations
- Tailored to your financial capacity and circumstances
We ensure the proposal is realistic, fair and compliant to increase the chances of approval.
How the Process Works
1
Proposal Preparation
With our help, you draft a composition offer outlining payment terms
2
Creditors' Meeting
Creditors vote on the proposal at a formal meeting
3
Acceptance Threshold
The proposal is accepted if:
- A majority in number of creditors vote in favour.
- At least 75% in value of voting creditors agree.
4
Bankruptcy Annulled
Once accepted, your bankruptcy is formally annulled and replaced by the terms of the composition
Why Work With Equinox Restructuring & Insolvency?
We bring:
- Trusted experience in managing compositions and annulments
- Practical advice on structuring offers creditors will accept
- Guidance on compliance and timing
- Personalised, non-judgmental support throughout the process
Our goal is to help you achieve the best possible outcome, quickly and respectfully.
Ready to Exit Bankruptcy Early?
If you’re currently bankrupt and want to explore a composition proposal, we can help you assess your options and prepare a strong offer.
Click here to book a cost and obligation free consultation with a registered trustee.
FAQs – In-Bankruptcy Compositions
How is a composition different from a full bankruptcy?
A composition ends the bankruptcy early and replaces it with an agreed payment arrangement. You no longer remain bankrupt once it’s accepted.
Who can propose a Section 73 Composition?
Only a person who is currently bankrupt. You’ll need your trustee’s assistance to call a meeting and present the proposal.
Can anyone help me fund the offer?
Yes. Offers are often funded by family, friends, or third-party contributions. We can guide you through this process.
What happens if creditors reject the proposal?
You remain bankrupt and the bankruptcy continues as normal.
Will my credit record still show bankruptcy?
Yes, the record of bankruptcy and annulment remains, but annulment through composition can improve your profile versus a full term discharge.
Do I still have to pay income contributions?
Once the composition is accepted and the bankruptcy is annulled, your legal obligations under bankruptcy (including income contributions) end.
How long does the process take?
A composition can be prepared and voted on within weeks, depending on the complexity of your affairs and creditor responsiveness.
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