An ordinary contract between the debtor and his creditors whereby the creditors receive pro rata a part of their claims and the debtor is discharged from the balance of the claims is:

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A nonstatutory composition is the ordinary contract between the debtor and creditors where the creditors receive a proportional part of their claims, and the debtor is released from the remaining balance of the claims without commencing formal legal proceedings. This is different from a statutory assignment, which involves the debtor assigning all assets to a trustee for distribution to creditors, an equity receivership, which is a court-appointed receiver taking control of the debtor's assets and managing them, and an automatic stay, which is a temporary halt on creditor collection attempts during bankruptcy proceedings.

An Ordinary Contract Between the Debtor and His Creditors Whereby