Is your business facing an ever increasing pile of debt? Have you realized there is no longer any way to navigate your way through the waters of owing creditors money? If you have reached the end of the line and you are seeking a way out, contact a bankruptcy lawyer in Southfield at our firm. We are here to assist you in handling insolvency. We will provide you with the information you need to make a well-informed decision for your business. We understand how stressful this time can be, and our goal is to get you through the process with the least amount of stress possible. Although filing bankruptcy might be the right thing for your business to do, pause to consider the alternatives that exist. We can help you examine a variety of other options including workouts, receiverships, and assignment for benefit of creditors.
Here we will explain the basics of assignment for benefit of creditors. This bankruptcy alternative could be the right choice for your business depending on the circumstances you are facing. This alternative employs a method in which you sign away everything your business owns and you allow an assignee to handle liquidating your assets.
Transferring to an Assignee
If you opt to explore the route of assignment for benefit of creditors, the first step is transferring your interests, titles, rights, and control of your business to an assignee. An assignee will be a company like our firm who can handle the liquidation of assets and negotiation of debts. The premise of this agreement is based upon the concept that you no longer can afford to pay your creditors, but you have assets that could be liquidated to pay off those debts. However, in this method you do not file bankruptcy, you simply sign away all your rights to a third-party trustee. As a local bankruptcy lawyer, we can act as this assignee.
The goal of this method is that after you sign over everything, the assignee will work to liquidate all assets and distribute those assets among the creditors owed. Oftentimes, the assignee will work quickly in selling things, securing a new business to take over agreements like leases, and in divvying out the assets to creditors.
What Are the Benefits of This Method?
Like other alternatives to bankruptcy, one of the greatest benefits to the method of assignment for benefit of creditors is the ability to avoid the negative repercussions and notoriety of bankruptcy. Although it is possible to eventually rebuild your credit and recover from filing a bankruptcy, it is almost always best to avoid this path if you possibly can. Some of the following are benefits of taking this alternative:
- You get to choose the assignee instead of a court designating this.
- This method is fairly cost effective.
- The process is faster, less formal, and requires less court hearings.
- Closure for your company is provided in a straightforward manner.
When you choose to sign a contract in an assignment for the benefit of creditors, there will often be a press release announcing the transfer. The good news, rather than sounding negative like filing bankruptcy, the release can be positive in nature. You can simply let your creditors know your assets are being transferred to the assignee’s company.
If you need help tackling the unfortunate event of insolvency, contact our experienced team. We can take over as the assignee and, in doing so, we can take over the stress of the situation for you. Although facing debt your business cannot solve is not a fun scenario, it can be mitigated through a well-formulated plan. We will take over the problems of your company and allow you to move forward in redirecting the path of your life. Not only can you move forward, your entire team is able to move forward when you pass responsibility to us.
Not only can we assist you with filing bankruptcy or finding an alternative solution, we can also help your business rebuild credit and we can help you make a better budgetary plan for the future. Contact a bankruptcy lawyer in Southfield today for assistance in understanding your options. We look forward to helping you move forward and out of this difficult situation.