Sell Assets To Pay Debts? What You Can Do And What You Should Do May Differ.
If you have been thinking about Chapter 11 or Chapter 13 bankruptcy as a business or personal debt relief solution, you may have considered selling assets to pay off debts. Making this move before filing for bankruptcy is legally risky. You could ruin your prospects of a successful bankruptcy case before it even gets off the ground. Using assets to pay debts before consulting with a bankruptcy law attorney is unnecessary and unwise. At The Bankruptcy Group, we offer free initial consultations. Personalized answers to your questions are within easy reach.
Using assets to retire debt may seem like a logical idea as you look for ways to avoid bankruptcy. However, before you sell anything or pay major debts, we encourage you to get the information you need to make choices that are truly in your best interests. Discuss your financial challenges with an attorney at our firm. Learn about relevant bankruptcy laws, rules and processes that can help you make the right decisions.
Why It Might Not Be Smart To Sell Assets To Pay Off Debts – At Least Not Yet
Several reasons not to sell assets to pay off debts before getting legal advice include the following:
- You might sell an asset that would otherwise be protected through bankruptcy exemptions.
- You could make a move that would not be allowable or in your best interests.
- Paying off large loans might mean that you would have to postpone bankruptcy for months or even a year. Otherwise, a bankruptcy trustee might conclude that you unfairly prioritized some creditors over others whom you did not repay.
- It may hinder you and your future Chapter 11 or Chapter 13 bankruptcy trustee from devising a debt reorganization plan that could include liquidating certain assets to pay off debts as part of the bankruptcy.
Handle The Resolution Of Your Business Or Personal Debts With Care
When your business or personal debt load has become burdensome, you may believe you can manage the situation through crafty maneuvers. However, be careful not to take one step forward that might set you two steps backward along your road to debt relief through bankruptcy. Your best strategies will be case-specific, depending on your business or personal financial big picture, your debt load’s size and structure, and your individual goals.
For an attorney’s customized analysis, call 888-710-4334 or contact a lawyer by email at The Bankruptcy Group.