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What advantages does the creditor gain from liquidation?

August 23, 2011


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Liquidation is a debt recovery method in which a creditor tries to force a debtor to pay. Although there is no guarantee that the creditor can collect the debt, sometimes liquidation is the only way to get the creditor's money back.

If the debtor has assets that can be sold, the creditor can collect the money owing or at least some part of it. The assets are transferred to a custodian who sells them for the benefit of the creditor.

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