Legal Question in Business Law in North Carolina

An automotive shop owes services to me but will soon be filing for bankruptcy. The owner is willing to give me inventory to make up for the services that have not been completed. Can I legally take the property in exchange for a refund of services?

Asked on 2/27/14, 7:16 am

1 Answer from Attorneys

Ellen Bluestone Bluestone Law, PLLC

It sounds like you are unlikely to receive any services from this auto shop, at least any time soon, and yet you say your are "owed" them. Given that bankruptcy will be filed it seems there are quite a few entities owed something by this shop and, unless you want to get in line with other creditors and wait for the bankruptcy court's allocation of limited resources, you may want to consider agreeing to take the value of what is owed to you in inventory. After filing bankruptcy the auto shop will not have the freedom to make this trade. In short, as long as you agree, and as long as bankruptcy proceedings have not been initiated, you may legally take the property in exchange for any debt owed to you.

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Answered on 2/27/14, 7:38 am

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