In a voluntary settlement, each creditor will be paid only 45 cents on a dollar immediately. This is an example of ________.
A) a composition
B) a combination of a composition and extension
C) an extension
D) a liquidation

Question

Quizplus · Accepted Answer

A voluntary settlement is a type of composition agreement where the debtor negotiates with creditors to pay only a percentage of the amount owed immediately. In this case, the creditors will be paid only 45 cents on a dollar immediately, which means they have agreed to accept less than the full amount owed.

In a Voluntary Settlement, Each Creditor Will Be Paid Only