Discharge of debt: which statement about consideration is correct?

• A. Discharge of not due debt: no consideration
• B. NY law requires writing for all discharges
• C. Discharge of not due, or disputed debt requires consideration
• D. Discharge of past due, undisputed debt: no consideration

Answer: (D)

Accord and satisfaction in debt discharge depends on whether the claim is disputed and whether it is due. When a debt is past due and undisputed, a creditor’s agreement to accept a lesser amount in full satisfaction of the debt can discharge the entire obligation without any separate consideration. The bargain works because the claim is fixed, the debtor offers payment of a lesser sum, and the creditor agrees to release the balance. This makes the discharge effective even though there isn’t a fresh consideration tied to the new promise.

If the debt weren’t due yet or if there were a genuine dispute about the amount or existence of the debt, a separate consideration (or other traditional requirements) would typically come into play to make a discharge or release enforceable.