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.

While New Jersey's ABC law predates the Federal Bankruptcy Code by approximately 150 years, many creditors are not familiar with this state-court insolvency process, as ABCs have more or less been supplanted by the Federal Bankruptcy Code. Although New Jersey courts have described ABCs as similar to Chapter 7 bankruptcy petitions, ABCs vary from federal bankruptcy proceedings in significant ways. For instance, unlike in a federal bankruptcy, where the United States Trustee assigns the bankruptcy trustee to a particular petition, in an ABC the debtor has the power to select who will serve as the "assignee," which is the fiduciary who represents both the debtor (known as the "assignor") and all creditors in the ABC proceeding.