Treynor Bankruptcy Lawyer, Iowa

A law that regulates the transfer of business assets so that business owners cannot dispose of assets in order to avoid creditors. If a business owner wants to conduct a bulk sale of business assets -- that is, get rid of an unusually large amount of inventory, merchandise or equipment -- the business owner must typically publish a notice of the sale and give written notice to creditors. Then, the owner must set up an account to hold the funds from the sale for a brief period of time during which creditors may make claims against the money. The prohibition against bulk sales is spelled out in the Uniform Commercial Code -- and laws modeled on the UCC have been generally adopted throughout the country.

In a bankruptcy proceeding, money collected through insurance, arbitration, mediation, settlement or a lawsuit to pay for exempt property that's no longer exemptible because it has been damaged or destroyed.

A claim made by someone who allegedly owes money, that the amount should be reduced because the other person owes him money. This is often raised in a counterclaim filed by a defendant in a lawsuit. Banks may try to exercise a setoff by taking money out of a deposit account to satisfy past due payments on a loan or credit card bill. Such an act is illegal under most circumstances.

A company hired by a creditor to collect a debt that it is owed. Creditors typically hire a collection agency only after they have made efforts to collect the debt themselves, typically through letters (called 'dunning' letters) and telephone calls. Collection agencies are regulated by the federal Fair Debt Collection Practices Act. Unfortunately, too many collectors ignore this law.

Debts that can be erased by going through bankruptcy. Most debts incurred prior to declaring bankruptcy are dischargeable, including back rent, credit card bills and medical bills. Compare nondischargeable debts.

A business structure that allows one or more partners (called limited partners) to enjoy limited personal liability for partnership debts while another partner or partners (called general partners) have unlimited personal liability. The key difference between a general and limited partner concerns management decision making--general partners run the business, and limited partners, who are usually passive investors, are not allowed to make day-to-day business decisions. If they do, they risk being treated as general partners with unlimited personal liability.

The process of paying off expenses and creditors, settling accounts, and collecting and distributing (to shareholders and owners) whatever assets then remain, all with the ultimate goal of liquidating or closing down a corporation or partnership.

An agreement to settle a contract dispute by accepting less than what's due. This procedure is often used by creditors who want to cut their losses by collecting as much money as they can from debtors who cannot pay the full amount.