How are deferred payments from the sale of a business treated in bankruptcy?

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How are deferred payments from the sale of a business treated in bankruptcy?

We have 3 annual deferred payments from sale of business in 2010 that are valued in February for payout in June. Sale was client assets under management with no compete clause, valued by remaining assets under management from bench mark established at client transfer date.

Asked on February 1, 2011 under Bankruptcy Law, Florida

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If it is an asset of the business then it will be treated as such in bankruptcy.  It will be income owed to the business - just like any account receivable - and it will counted toward income in the filing of the petition.  How the trustee and the  bankruotcy court will deal with it will depend on many other issues involved.  Are you just considering filing or have you already filed?  Have you discussed the matter with a bankruptcy attorney?  You should.  In detail.  This way you can best see how you wish to proceed in the matter in its entirety. There may be other options for you that you do not realize.  Good luck to you. 


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