[Anonymous]

Which of the following actions between a debtor and its creditors will generally cause the debtor’s release from its debts?

A. Composition of creditors

B. Assignment for the benefit of creditors

both a and b

just a

just b

neither a or b

the answer says its just a;

it says that when a composition of creditors occurs, the creditors agree to accept less money for the satisfaction of the debt. Once the debtor pays under the agreement the debt is discharged.

here is my question, maybe i am reading way to much into this, but the creditors composition doesnt discharge the debt, it is the debtor paying the agreed on amount. For example, if the creditors agree to knock the payment terms down, and give a lower interest rate, and the debtor agrees and continues to make payments, until the debtor has finished paying, his debt is not discharged even though there was a composition of creditors

my head hurts… 🙁

[Anonymous]

BUMP???

[Anonymous]

BUMP???

[Anonymous]

Bueler???

Bueler???

Bueler???

[Anonymous]

Bueler???

Bueler???

Bueler???

[Vlakmir]

A composition of the creditors is an agreement between the debtor and creditor to say “hey, you can't squeeze blood out of a stone, let's call it $500 instead of $800 and call it good”, so they call it good and discharge the debt of $800 for $500.

An assignment for the benfit of the creditors is the courts coming and saying

“hey, you have $500 , give them that $500 for that $800 debt right now (or piece of property).

They still owe the $300, there has just been an assignment of money for the debt.

That's why, generally a composition discharges the debt and an assignment does not generally discharge the entire amount.

Cheers

REG - 92
AUD - 90
BEC - 82
FAR - 82
BISK Review Materials
DONE! /Happydance

[Vlakmir]

A composition of the creditors is an agreement between the debtor and creditor to say “hey, you can't squeeze blood out of a stone, let's call it $500 instead of $800 and call it good”, so they call it good and discharge the debt of $800 for $500.

An assignment for the benfit of the creditors is the courts coming and saying

“hey, you have $500 , give them that $500 for that $800 debt right now (or piece of property).

They still owe the $300, there has just been an assignment of money for the debt.

That's why, generally a composition discharges the debt and an assignment does not generally discharge the entire amount.

Cheers

REG - 92
AUD - 90
BEC - 82
FAR - 82
BISK Review Materials
DONE! /Happydance

[Topsya]

Composition agreement with creditors occurs when creditors agree to accept less that full amount AS FULL SATISFACTION OF DEBT

Meaning, that it occurs only if debtor is READY to pay RIGHT NOW so debt WILL BE DISCHARGED.

You cannot just knock off a chunk and keep waiting for a debtor to pay. It's kind of a simultaneous actions of debtor and creditor resulting in the discharge of debt

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

Composition agreement with creditors occurs when creditors agree to accept less that full amount AS FULL SATISFACTION OF DEBT

Meaning, that it occurs only if debtor is READY to pay RIGHT NOW so debt WILL BE DISCHARGED.

You cannot just knock off a chunk and keep waiting for a debtor to pay. It's kind of a simultaneous actions of debtor and creditor resulting in the discharge of debt

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Author]

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