In order to avoid bankruptcy, management sometimes seeks to work with creditors. One method of restructuring debt involves composition, which involves a reduction in the amount of the payment to be made.

Question

Quizplus · Accepted Answer

Composition is a method of debt restructuring where the debtor and creditors agree on a reduced amount of payment, allowing the debtor to avoid bankruptcy by making more manageable payments.

In Order to Avoid Bankruptcy, Management Sometimes Seeks to Work