The promise of a creditor to refrain from debt collection in exchange for a promise by the debtor to modify the terms of the transaction is legally sufficient consideration.

Question

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This statement is true. The creditor's promise to refrain from debt collection qualifies as consideration, as the debtor is relieved of the obligation to pay the debt. Meanwhile, the debtor's promise to modify the transaction terms also qualifies as consideration, as the creditor is receiving something of value in exchange for their promise. Therefore, there is a valid contract with legally sufficient consideration on both sides.

The Promise of a Creditor to Refrain from Debt Collection