Assignment for the Benefit of Creditors
An Assignment for the Benefit of Creditors, commonly called an ABC, is a cost saving alternative to foreclosure. The assignment grants immediate asset control to the assignee. Once an ABC is executed, the Assignee steps into the shoes of the Assignor (debtor) and is able to liquidate its assets and pay its creditors
Traditionally, a lender must endure the foreclosure process and wait out the redemption period before it is able to market and sell the property. If an ABC is executed, however, the Assignee is able to list the property for sale immediately. Also, a foreclosure or a deed in lieu, may not be a viable option as the lender does not want to take title to the property due to environmental or other liability issues. An ABC alleviates these concerns by allowing the Assignee to take title rather than the lender.