Asset liquidation is the process of converting assets into cash. This typically occurs when a company or individual needs to pay off debts, settle financial obligations, or close down operations. Liquidation can involve selling physical items, such as real estate or inventory, or converting financial assets, like stocks or bonds, into cash. There are two main types of liquidation: voluntary and involuntary. In voluntary liquidation, the owner decides to sell assets to meet financial needs. In involuntary liquidation, a court may order the sale of assets to satisfy creditors. Both types aim to maximize the value received from the assets.