Composition means that the debtor, the person in debt, meets a settlement on the payment with his or her creditor. Through the composition, the creditor reduces its claim to a certain amount or by a certain percentage. The parties also agree on how and when the remaining debt will be paid. If the debtor was insolvent at the time of the settlement, the ‘profit’ the debtor makes through the composition is tax-free.
We who work with insolvencies and business settlement