Legal Definitions - liquidate

Definition: To liquidate assets means to sell non-liquid assets on the open market to convert them into liquid assets. This can be done voluntarily or through the bankruptcy process.

Example 1: An individual may choose to liquidate assets to get cash for other obligations. For example, if someone needs money to pay for medical bills, they may sell their non-liquid assets like a car or jewelry to get cash quickly.

Example 2: In the bankruptcy process, a creditor may force a debtor to liquidate assets to collect debt. For instance, if someone owes money to a bank and can't pay it back, the bank may go to court to get a writ of execution. This gives the sheriff the power to take the debtor's assets and sell them to pay off the debt.

Both examples illustrate how liquidating assets involves selling non-liquid assets to get cash. In the first example, the individual chooses to do it voluntarily, while in the second example, it's done through the bankruptcy process.