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Giving Security

If a debtor gives additional security which the creditor has no right to demand, then the debt will be discharged in full.  The additional security is an adequate consideration for the creditor to accept lesser amount than due and it discharges the debt in full.[i]

In Lewis v. Akerberg,[ii] court held that, a liquidated claim may be the subject of an accord and satisfaction.  If a collateral benefit, such as specific security, is received by the creditor, then such benefit even though less than the amount due discharges the claim.  The security constitutes legal consideration for discharge of claim.

[i] In re Zerodec Mega Corp., 47 B.R. 304 (Bankr. E.D. Pa. 1985)

[ii] 118 N.E.2d 166 (Ohio C.P. 1953)

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