Asked by Jessika Patterson on May 25, 2024
Verified
A composition agreement is a contract between creditors and a debtor in which the creditors agree to accept a lesser amount to satisfy the debts and discharge the remaining debt.
Composition Agreement
An arrangement between a debtor and their creditors in which the creditors agree to accept a partial payment in satisfaction of the debts owed.
Creditors
Creditors are individuals or entities that are owed money by another entity or individual, known as a debtor.
Debtor
A person, company, or country that owes money.
- Develop an understanding of the principal basics of assorted liens and how their creation is effectuated.
Verified Answer
SD
Scott DrakeMay 27, 2024
Final Answer :
True
Explanation :
A composition agreement is indeed a contract where creditors agree to accept a lesser amount than what is owed to them by the debtor, in exchange for discharging the remaining debt, allowing the debtor to avoid bankruptcy or further financial distress.
Learning Objectives
- Develop an understanding of the principal basics of assorted liens and how their creation is effectuated.