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Creditors' Issues: Forbearance Agreements and Settlement Agreements



by Heather M. B. Ferris
Lawson Lundell LLP - Vancouver Office

Sarah J. Nelligan
Lawson Lundell LLP - Vancouver Office

September 19, 2011

Previously published by Continuing Legal Education Society of British Columbia’s course on Bankruptcy & Insolvency Basics for Lawyers on February 2011

Creditors and debtors often enter into agreements with respect to the repayment of indebtedness. These forbearance agreements or “standstill agreements” are useful tools whereby both creditors and debtors can work together to reach a common goal without the immediate need for realization of assets in a formal insolvency proceeding. In contrast, a settlement agreement is designed to bring finality to all or some part of the credit arrangement with the debtor. As such, particular care has to be taken under a settlement agreement to insure that what is being settled and released does not affect other parties or other issues that are not being resolved under the agreement.


 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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