Question

Jason is a small business owner. he has a dry cleaning business. one year, jason has to replace nearly all of his equipment, and the rent on his building increases. jason borrows money to cover his expenses. however, business is slow and jason eventually realizes that he must declare bankruptcy. neither jason nor his creditor wants the expense and hassle of going to court. they can settle their creditor-debtor relations outside of court through a:

Answer 1

Work-Out is the strategy, debtors use to payback loans or debts to the creditor.

Work-out in business terms means a way to ease the borrower by developing work-outs for the business customers when they are in difficulty.

In this example, Jason is about the file the bankruptcy, because he is unable to payback the loan he took to meet his expenses. But the creditor and he himself don't want to indulge in the court room hassles, so they develop work-outs for themselves to payback the credit Jason took to continue his business activities.

Answer 2

They can settle their creditor debtor relations out of court through a WORKOUT.
A workout refers to an out of court arrangement in which a debtor and a creditor reach some agree about how the debtor is going to pay the creditor back.