From Wikipedia, the free encyclopedia
US corporation under bankruptcy protection but still in possession of its property
A
debtor in possession
or
DIP
in
United States bankruptcy law
is a person or corporation who has filed a
bankruptcy petition
, but remains in possession of property upon which a
creditor
has a
lien
or similar
security interest
. A debtor becomes the debtor in possession after filing the bankruptcy petition.
[1]
[2]
[3]
A corporation which continues to operate its business under
Chapter 11 bankruptcy proceedings
is a debtor in possession.
Under certain circumstances, the debtor in possession may be able to keep the property by paying the creditor the fair market value, as opposed to the
contract
price. For example, where the property is a personal vehicle which has depreciated since the time of the purchase, and which the debtor needs to find or continue employment to pay off his debts, the debtor may pay the creditor for the fair market value of the car to keep it.
See also
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Notes
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