Composition with Creditors -- Assignment to Trustee by Debtor

• Category: Contracts - Composition with Creditors
• State: Multi-State
• Control #: US-0929BG
• Format: Word; Rich Text

Description

A composition agreement is an agreement made between an embarrassed or insolvent debtor and two or more of his creditors, that each of the creditors entering into the agreement will be paid a specified amount, less than the whole of their claims, and the creditors agree to accept such payment in full satisfaction of their claims. The agreement works substantially an accord for which the consideration is the satisfaction to be made by the debtor, and such an accord is no bar to suit on the original debt, unless the satisfaction is performed. Composition with Creditors -- Assignment to Trustee by Debtor is a legal term used to describe a procedure whereby a debtor, who is unable to pay all of his or her creditors in full, assigns their assets to a trustee. The trustee is then responsible for negotiating with the creditors to come up with a reduced payment plan or composition of debt. There are two types of Composition with Creditors -- Assignment to Trustee by Debtor: voluntary and involuntary. Voluntary compositions are those that the debtor agrees to on their own, while involuntary compositions are those that are imposed by a court or other legal authority. In either case, the trustee is responsible for collecting the assets, liquidating them, and then distributing the proceeds to the creditors according to the agreement. The trustee is responsible for ensuring that the creditors receive fair and equitable terms, and is also responsible for making sure that the debtor meets their obligations under the agreement. This procedure is often used when a debtor is unable to pay all of their creditors in full. It is a way for debtors to avoid bankruptcy and to come to an agreement with their creditors.

Composition with Creditors -- Assignment to Trustee by Debtor is a legal term used to describe a procedure whereby a debtor, who is unable to pay all of his or her creditors in full, assigns their assets to a trustee. The trustee is then responsible for negotiating with the creditors to come up with a reduced payment plan or composition of debt. There are two types of Composition with Creditors -- Assignment to Trustee by Debtor: voluntary and involuntary. Voluntary compositions are those that the debtor agrees to on their own, while involuntary compositions are those that are imposed by a court or other legal authority. In either case, the trustee is responsible for collecting the assets, liquidating them, and then distributing the proceeds to the creditors according to the agreement. The trustee is responsible for ensuring that the creditors receive fair and equitable terms, and is also responsible for making sure that the debtor meets their obligations under the agreement. This procedure is often used when a debtor is unable to pay all of their creditors in full. It is a way for debtors to avoid bankruptcy and to come to an agreement with their creditors.