what does it mean to liquidate assets

To liquidate assets means to convert non-liquid assets into liquid assets by selling them on the open market. This process is carried out when an individual or company needs cash to fulfill other investment or non-investment obligations, to reallocate funds, or to pay off debts. Liquidating assets can also happen when a business is closing or restructuring, and the assets are sold to pay creditors. The assets that can be liquidated include real estate, automobiles, equipment, raw materials, financial investments, store fixtures, machinery, and personal belongings. The act of selling an asset and turning it into cash is called "liquidating" the asset. Liquidation can also refer to the act of exiting a securities position. The process of liquidating assets in the bankruptcy process can happen when a creditor liquidates a debtors assets to collect debt. The liquidation process happens when a company is insolvent and can no longer meet its financial obligations.