composition
- A settlement deal between a debtor who can't pay back their debts in full and the creditors, where the debtor pays back a portion of the debt and it is considered as if the full debt has been repaid
- The company was unable to pay its debts in full, so it entered into a composition with its creditors.
- If the debtor can't repay his loans, he may negotiate a composition to avoid further legal actions.
- In a composition, settlement is made by giving the creditors a part payment, which they accept as full discharge of the debtor's obligation.
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