Credit: Adobe Stock Assignment for the Benefit of Creditors? One Creditor's Experience With an Archaic State Insolvency Process
This article provides insight, from a creditor's perspective, into the ABC process in New Jersey. "My advice to any creditors that find themselves in an ABC is to try to move it to a federal bankruptcy court as soon as possible."
September 08, 2022 at 10:00 AM
9 minute read
An Assignment for the Benefit of Creditors ("ABC") is the state court analogue to a federal bankruptcy. Most, if not all, states have some version of an ABC (sometimes called a general assignment), which is governed either by statute or common law rather than federal bankruptcy law. In New Jersey, ABCs are governed by statute (N.J.S.A. §2A:19-1, et seq.), the earliest version of which dates back to the 1820s, i.e., well before the Federal Bankruptcy Code was codified in 1978.
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