JuTara Owns a Small Carwash Business

Essay

JuTara owns a small carwash business. Due to severe dry weather, the price of water increased, and she had to increase her prices, and many customers stopped coming. JuTara had several creditors. She told them that she does not want to sell her property and that she would like to stay in business, but that she is considering bankruptcy unless her debts can be reduced. By what type of voluntary agreement would creditors receive only a percentage of the amount owed to them? What are the principles involving such an agreement, and why would a creditor consider such an agreement?