Chapter 7 Q & A — Can I sell assets to pay past due rent before filing Chapter 7?

by Janne Berry Osborne on November 12, 2012

in Bankruptcy, Chapter 7, Q&A

This is a Chapter 7-Bankruptcy Law question that I answered on Avvo.com on 11/11/12.

“Can I sell my business assets and turn over these monies to my landlord as payment on lease before filing chapter 7?  Landlord has been accepting less money per month than due for the last 2 to 3 years.  Lease has expired last March.”

MY ANSWER:

There is too much information missing to be able to completely answer your question. If you are planning on closing your business and will not be remaining in the premises, selling your assets and paying past due rent could very well be considered a preference — which is a major problem in a bankruptcy.

Before you sell, dispose of, or destroy any asset (like your business assets), you MUST talk to a bankruptcy attorney to protect yourself and also to make sure you do not put the landlord in a bad position.

I urge you to immediately contact one of the many very well-qualified and experienced Business Bankruptcy Attorneys in the Lexington/Columbia area.

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