In a voluntary settlement, each creditor will be paid only 45 cents on the dollar immediately. This is an example of

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A voluntary settlement that pays creditors less than the full amount owed is known as a composition. In this case, each creditor will only receive 45 cents on the dollar immediately, which indicates that they are accepting a reduced payment to satisfy the debt. This arrangement is a form of debt relief for the debtor.

In a Voluntary Settlement, Each Creditor Will Be Paid Only