In a Voluntary Settlement, One Group of Creditors Having Claims

question 122

Multiple Choice

In a voluntary settlement, one group of creditors having claims of $1,000,000 will be immediately paid 95 cents on the dollar. The remainder of the creditors will postpone payment an additional 60 days. This is an example of

• A) a composition.
• B) a combination of a composition and extension.
• C) an extension.
• D) a liquidation.

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Definitions:

Commonly Used

Frequently utilized or employed in general practice.

Tenants by the Entirety

A form of joint property ownership specifically designed for married couples where both spouses have equal and undivided interest in the property.

Property Ownership

The legal right to possess, control, benefit from, and transfer real estate or personal property.

Heir

A person legally entitled to receive part of the estate of a deceased person, either by will or through intestate succession laws.