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Forced Sale

Definition - What does Forced Sale mean?

A forced sale is when property or assets of value are sold in order to pay back debts incurred by the owner of the property involuntarily. Such instances are started when a debtor creates large debts and must file bankruptcy or when a loan is secured through physical collateral, such as a house, and the loan is defaulted on. A forced sale is a sale is done against the owner's wishes.

Justipedia explains Forced Sale

Many bankruptcy cases have forced sales, especially when it is a business that is filing bankruptcy and there is stock or other merchandise on hand that could be sold for cash and applied against the debt. If a liquidator is appointed to a bankruptcy, it is their job to find as many items that can be sold as possible in order to satisfy as much of the outstanding debt as they can before the rest of the debt is scheduled for repayment or written off.

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