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Illinois Business Bankruptcy Attorney | Assignment for Benefit of Creditors

Illinois Bankruptcy Assignment Attorneys

If your business is in distress and you plan to liquidate it,Chapter 7 bankruptcy is not your only option. An “assignment for the benefit of creditors” (also called an “assignment”) is another form of bankruptcy that not subject to federal law. Liquidating your business in this way may have strategic and quantifiable benefits for some businesses. At Covey Bankruptcy, our attorneys are knowledgeable about all types of business bankruptcy and bankruptcy alternatives. We are experienced in handling bankruptcy assignments and liquidating a business in the most efficient and orderly fashion.

Understanding Bankruptcy Assignments

An assignment for the benefit of creditors is an alternative to a Chapter 7 bankruptcy, and they have many similarities. Under an assignment, an assignee is used to liquidate a business’ assets and distribute the proceeds among a business’ creditors. Any remaining funds are returned to the business owner(s) and shareholders. An assignee operates much like a bankruptcy trustee without the restrictions imposed by federal bankruptcy law.

When to Use Bankruptcy Assignments

Liquidating through an assignment is not as common as liquidating using Chapter 7 bankruptcy, but there are circumstances for which when it may indicated. For example, when a single creditor will receive all or most of a company’s assets, an assignment might be beneficial. At Covey Bankruptcy, we are skilled in business liquidation and identifying when to pursue an assignment and when to file for Chapter 7 bankruptcy protection. We will closely examine your company’s financials and work with you to choose the most appropriate means of liquidation.

If you are considering going out of business, call us to schedule a free consultation. Our firm serves businesses and individuals in DuPage, Kane, Kendall and Will counties.

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