Categories
-
Recent Posts
Tags
Bankruptcy bankruptcy act bankruptcy infomation blog credit card debt credit repair debt agreement debt collection guidelines Debt Consolidation debt consolidation loans debt reduction strategies debt solutions free credit history mortgage refinancing Personal Insolvency Agreement personal insolvency agreements Repayment Calculator super annuation
Cancellation of Bankruptcy
You may be surprised to find out that Bankruptcy isn’t permanent. In fact you can actually have it cancelled or annulled and it will be like it never happened.
The vast majority of bankruptcies last for 3 years and end with the bankrupt being discharged. Being discharged release the person from bankruptcy. Their right to travel overseas is reinstated and they no longer have to make income contribution to their trustee if they’re on a high income.
An annulment is a complete undoing of the bankruptcy. It is as if the bankruptcy never happened, apart from the fact that it will still appear on the public record (the NPII). There are 3 ways a bankruptcy can be annulled.
1. Pay the debts in full
We call this the Lottery, Inheritance or Windfall Annulment. If you come in to enough money to pay all of the debts plus the costs the bankruptcy is annulled. If you can pay off your debts you’re not insolvent so there is no need for you to be bankrupt. Sometimes this will happen when property seized in bankruptcy is seized and sold and the money received is enough to cover the debt plus expenses.
2. A Proposal
While you’re bankrupt you can make a proposal to your creditors to end your Bankruptcy. A “Section 73 Proposal’ lets you make an arrangement with your creditors as an alternative to bankruptcy. The main condition of the bankruptcy is that it needs to be a better deal for creditors than they would get under bankruptcy. It’s your creditors that will decide whether or not to accept your proposal. If they agree then the bankruptcy is annulled. However you better keep up your end of the bargain.
3. The Courts
You can apply to the Courts to have your bankruptcy cancelled. The only reason a court will cancel a bankruptcy is if the person should never have been bankruptcy in the first place. There are many reasons why you shouldn’t have been made bankrupt (you had amnesia, you were in coma, creditors didn’t follow due process or did something illegal etc.)