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Questions tagged [bankruptcy]

relating to organizations or individuals running out of cash flows. Additional context specific tags may be used as appropriate.

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Differences in Auction/Foreclosures/Foreclosure Auctions

In the residential housing market, my understanding is that there are three types of property distress: Auction Foreclosures Foreclosure Auctions How are they exactly different? My understanding is ...
Frank Swanton's user avatar
8 votes
2 answers
3k views

Declaring bankruptcy when I am the primary and my son is the co-signer on his car loan

Four years ago, I thought I was cosigning on my son's car. At the time, I was in Oklahoma and he was a New Mexico, so everything was done through FedEx. I have since moved to New Mexico and ...
Connie 's user avatar
1 vote
0 answers
67 views

Does a bankruptcy cancel out capital losses? (US)

If I filed for chapter 7 bankruptcy does the amount of the debt discharged in bankruptcy cancel the prior capital losses i had so that I am unable to use those losses to cancel capital gains? Are ...
sterid's user avatar
  • 181
3 votes
1 answer
261 views

How can I know the price and make sure insurance is going to pay for a certain procedure beforehand?

This is a test for me. I'm used to using the software side of StackExchange, but I think this format could work for this. Let's see and please let me know if there's a better place to discuss these ...
A Campos's user avatar
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0 votes
3 answers
2k views

Have companies gone bankcrupt shortly after their stock going up?

Recently, Spotify, while doing 70M profit for Q3, laid off 1500 people, which could approximately double those profits (those people would have cost around 280M a year). This had their stock close up ...
Nowhere man's user avatar
0 votes
2 answers
73 views

What is the probability of each tier of creditor/equity claims being made whole?

In bankruptcy, the broad "tiers" for debt settlement are: Secured debt (going in order of first lien to second lien and so on) Priority unsecured debt General unsecured debt Preferred ...
MegaZeroX's user avatar
  • 143
0 votes
1 answer
55 views

Determining the Amounts Owed for an Australian Personal Loan

Lately, I have been lending someone from Australia money online. It has been going on for more than a year, and Alex (the person I lent money to) pays me back from time to time. However, he failed to ...
wilbur377's user avatar
0 votes
2 answers
118 views

Whose balance sheet is relevant to gauge the risk that I lose my shares in case of financial bankruptices?

If there is a financial crisis in the future; whose balance sheet is relevant to assess the risk that I lose my shares in case of bankruptcies of financial institutions? I assume it is the balance ...
Mikke Mus's user avatar
  • 129
2 votes
2 answers
1k views

How does SIPC insurance help a small investor with a fixed portfolio that is currently down below original value?

If your original portfolio was worth $500k started a year ago but the same amount of shares holdings is currently only worth $350k, does it mean you are insured at most $350k? Or all of the stock ...
surewin's user avatar
  • 29
7 votes
7 answers
937 views

Are there "banks" (or something morally equivalent) which merely stores their clients' money and doesn't invest/lend/etc it?

Another year, another major bank or two goes down because it decided to take the money that it was entrusted with it and go gamble. All of them fear "bank runs" because they know that they ...
Vilx-'s user avatar
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3 votes
1 answer
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Is it a good idea to spread investments over multiple stockbrokers?

In the UK, I believe stock brokers are required to use nominee accounts to hold shares on behalf of individual investors, so that if the stock broker were to collapse the investments themselves are ...
DBPaul's user avatar
  • 131
1 vote
1 answer
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Are assets held under brokerage at risk of a bank's bankruptcy proceedings?

I know that the FDIC guarantees cash deposits up to a maximum of 250K, but what happens to assets held in a bank's brokerage arm? For instance, if someone has 10,000 shares of MSFT deposited in a bank ...
AlanSTACK's user avatar
  • 1,570
0 votes
1 answer
81 views

What are alternatives to cash deposits, if you need short term liquidity above the FDIC insured limit? [duplicate]

Could you, for example, invest everyting into Bonds or ETFs? Are they safe in case the bank goes bankrupt? Are they liquid enough? What is the timeframe to convert these alternatives to cash? Minutes, ...
Reto Höhener's user avatar
5 votes
1 answer
1k views

What happens to SIVB put option holders?

As title implies - I own put options (Strike Price $125, exp. March 17 2023). I am wondering what happens to other owners of put options. As we all know now, SIVB is in receivership. I do not own ...
Nick's user avatar
  • 51
26 votes
4 answers
5k views

What happens to depositors at Silicon Valley Bank?

Today, Silicon Valley Bank is bankrupt, the second largest bank failure in American history. What happens to its depositors? Will they be able to withdraw (some of) their money? How long will they ...
Quitting Due To Antisemitism's user avatar
3 votes
0 answers
136 views

What is the worst that can happen if one does not file for bankruptcy but cannot pay their debt either (in Canada)?

In a situation when one does not file for bankruptcy, yet does not pay their debts, collectors start calling and mailing, then the creditors may file a lawsuit. But if one doesn't have any property or ...
sequence's user avatar
  • 227
-8 votes
2 answers
563 views

Why is a ‘Q’ added to the ticker symbol of a bankrupt company?

I read on investopedia.com: If it's a Chapter 11 bankruptcy, common stock shares will become practically worthless and will stop paying dividends. The stock may be delisted on the major stock ...
Franck Dernoncourt's user avatar
0 votes
2 answers
280 views

If ETFs are often good and most companies will someday go bankrupt, why shouldn't you short a large number of random companies?

Maybe my question is trivial but I can't find an answer on the internet. After reading a lot about personal finance I deducted that I should hold S&P500 or World ETF for the long term, at least 5 ...
JKHA's user avatar
  • 129
1 vote
1 answer
146 views

Does bankruptcy of a wholly owned subsidiary mean bankruptcy of the parent company?

I read a critical article in a Finnish newspaper about a Finnish energy company (Fortum) buying most of a risky energy company (Uniper). Eventually Fortum lost practically all of the money invested ...
juhist's user avatar
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1 vote
0 answers
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Remodeling contractor went broke, didn't deliver services paid for - deductible?

In spring of 2021, I hired a remodeling contractor in Illinois and paid him progress payments totaling about 90% of the contract price. Then he went broke, leaving a mess, which turned out to be less ...
Comissar's user avatar
1 vote
2 answers
119 views

How does the legal "deposit insurance" work if you have large debts, but also liquid funds?

Assuming you have a mortgage of 700K CHF (i.e. minus, debts) But you have 300K CHF in liquid assets on your savings account. If the bank goes bankrupt, you have 100K guaranteed back in Switzerland (...
Sybil's user avatar
  • 692
1 vote
0 answers
83 views

Can a SEPA direct debit be refunded in case of bankruptcy?

Payments via SEPA direct debit (customer to business) can, in normal circumstances, be refunded unconditionally from the client's bank's website for eight weeks after the date of payment. Is this ...
FrederikVds's user avatar
5 votes
1 answer
470 views

What can I do as a common citizen if it seems like my country is going to be bankrupt like Lebanon or Zimbabwe?

I saw that Lebanon or Zimbabwe are facing very complex problems in their economy. I am from Sri Lanka. I hear news every day that our country doesn't have enough US dollars. So the government has ...
President of Foolish People's user avatar
3 votes
1 answer
487 views

Is it possible for an ETF to go bankrupt?

ETFs have liabilities and expenses. What if the value of the ETF's holdings fall to such a point where the assets do not cover the liabilities and expenses? Is it possible for ETFs to go bankrupt in ...
Flux's user avatar
  • 17.1k
4 votes
0 answers
68 views

Does the distribution of a dynasty trust count as income for purposes of chapter 7 bankruptcy?

Assume a person is one of the beneficiaries of a dynasty trust fund. The dynasty trust is irrevocable and perpetual, set in a US state that allows perpetual trusts. Annual distribution of the trust to ...
Mindwin Remember Monica's user avatar
5 votes
0 answers
93 views

Do foreign debts require special treatment in a bankruptcy petition?

I have foreign debts, and I'm aware that while they cannot be discharged in the USA where I am filing, they still need to be declared. My question is simply if they should be included with the ...
J Friedman's user avatar
1 vote
2 answers
78 views

Impact of rising interest rates on default risk of existing junk bonds?

When interest rates rise, we all know that Math shows that the value of a bond will drop, but that's not my question. Intuition says that there's an indirect risk, in that rising rates might hurt ...
RonJohn's user avatar
  • 50.7k
4 votes
2 answers
293 views

How are assets stripped before bankruptcy? [closed]

This New Yorker article says ...hedge funds and private equity have used leveraged buyouts to purchase chains like Sears and Toys R Us, and then stripped their assets, including real estate, en route ...
have you seen this channel's user avatar
12 votes
1 answer
4k views

Why would you risk bankruptcy if you lend more money than you own?

Difficult to summarize the question in just a few words, so let me elaborate here. I am currently reading the Financial Times Guide to Banking by Glen Arnold, section Money creation, and there is ...
user1301428's user avatar
0 votes
2 answers
193 views

What happens to a company's ticker when bought out by a private company?

A U.S. company files for chapter 7 bankruptcy. A private company in Hong Kong buys the U.S company's IP and brand name to continue the company. The U.S stock ticker for the company still trades. It is ...
Kushimaru's user avatar
1 vote
2 answers
105 views

Too Big To Fail, Question about the SEC and Bankruptcy

After watching the movie, I still couldn't understand the doubt and scare the SEC chairman had to ask Lehman to file for bankruptcy. Could someone explain why this was a problem to tell them straight ...
Akshay Patil's user avatar
1 vote
2 answers
289 views

What happened to the shares in this company?

I own some shares in a company OAS that was delisted from Nasdaq. It went to trade at OTC under ticker OASPQ. It later underwent a reorganization (Chapter 11) and is back trading at Nasdaq under its ...
Clone's user avatar
  • 153
8 votes
3 answers
3k views

Can (did already) the GME-related hedge funds cover the $5 billion?

Yet another GME question I'm afraid. Straightforward... The GME-related hedge fund(s?) in question lost about $5 billion. Thus, they have to send a cheque for $5 billion† to their broker(s), and/or ...
Fattie's user avatar
  • 13.8k
21 votes
5 answers
8k views

Why don't most people file Chapter 7 every 8 years?

Please explain to me why more people don't follow a formula like this: Converting all their assets into exempted assets (for which there are tons of options, regardless of your state -- ERISA-...
SAH's user avatar
  • 353
1 vote
1 answer
312 views

Why is there heavy volume in a penny stock about to become worthless?

Tailored Brands (TLRD before, TLRDQ after the bankruptcy), owner of Men's Wearhouse and Jos A. Bank, filed for Chapter 11 back in August. It's about to emerge from bankruptcy later this month (end of ...
Lajos Nagy's user avatar
2 votes
0 answers
168 views

What happens to wages when you go bankrupt? (England)

I am having a difficult time keeping up with my payments during the pandemic after being furloughed since March. I have contacted StepChange and they have advised me that the best course of action for ...
bbface's user avatar
  • 21
37 votes
3 answers
9k views

Why do some companies choose to file for bankruptcy if it has cash to pay off its immediate debts?

Take for example the car rental business Hertz Global Holdings Inc (NYSE: HTZ). On May 22, the company filed for bankruptcy protection. But their balance sheet still looked relatively healthy at the ...
AlanSTACK's user avatar
  • 1,570
0 votes
2 answers
152 views

Is it possible to keep mortgage after bankruptcy?

If one declares a bankruptcy, can he or she keep his/her mortgage account and continue repaying it, while erasing all the other debts? In general, is it possible to negotiate to keep some credit ...
sequence's user avatar
  • 227
3 votes
2 answers
209 views

Trying to understand what happens with a brokerage firm's customers when it goes bankrupt (case of study: Lehman Brothers)

I'm trying to understand how secure it is to own mutual funds/ETFs, not in terms of market volatility etc., but in terms of judicial security (i.e. what happens to your holdings if the firm goes ...
Martel's user avatar
  • 1,281
-3 votes
1 answer
157 views

Does a high beta indicate a higher risk of bankruptcy?

I recently asked Should retail investors learn and use the capital asset pricing model (CAPM)?, where a good answer mentioned that "beta" is a rough measure of risk, measured based on the ...
Flux's user avatar
  • 17.1k
25 votes
5 answers
11k views

If a bank fails, will debt be wiped out?

I have debt to Capital One. If they fail, and whoever the trustee is fails, will the debt eventually get lost in bankruptcy proceedings? Considering the Lehman bankruptcy is still ongoing, well past ...
user avatar
2 votes
2 answers
421 views

Does tracking stock become worthless when the parent company becomes worthless?

If a parent company that has tracking stock stock becomes worthless, do the shareholders of the tracking stock have claims on assets (e.g. subsidiaries) that the tracking stock tracks? Or is tracking ...
Flux's user avatar
  • 17.1k
1 vote
1 answer
73 views

How do bankruptcy limits on property liquidation work?

I'm reading a page which lists limits on equity that can be kept when filing for bankruptcy. In particular, this page says the following: You have a motor vehicle that is valued at $15,000 and there ...
sequence's user avatar
  • 227
0 votes
3 answers
328 views

Why would anyone choose to file for bankruptcy?

A bankruptcy wipes out the debtor's resources to pay creditors. If one has some paid off property but defaults on some unsecured accounts why would he or she want to file for bankruptcy thus risking ...
sequence's user avatar
  • 227
1 vote
2 answers
335 views

What happens to the money over the FDIC limit when a bank fails?

I had about $4-5K at Countrywide Financial and when it became bankrupt. I recovered all my money thanks to the FDIC. I didn't encounter any problems when recovering the money, but that was probably ...
puzzled's user avatar
  • 1,016
0 votes
2 answers
243 views

What will happen to Whiting Petroleum (WLL) options after restructuring completes

Whiting Petroleum is currently in chapter 11 restructuring. If the restructuring plan is agreed, existing stock holders will get a 3% stake in they call "new common stock" and bond holders ...
Anachronism's user avatar
0 votes
1 answer
152 views

Should I self report a bankruptcy for a rental?

I am looking at a couple of questions on a rental application that I have never been asked before. One is asking to check off if you ever declared bankruptcy. What if the bankruptcy was over seven ...
Daniel's user avatar
  • 355
1 vote
2 answers
276 views

Why is Hertz still being traded?

Or more generally: How can a firm that files for bankruptcy still be traded? What is a bankrupt firms worth? Disclaimer: I am a complete noob regarding these topics and I probably miss already some ...
dingalapadum's user avatar
2 votes
1 answer
294 views

Are there high-priced shares of quasi-bankrupt companies that are "traded just for fun"?

Suppose that some successful popular company X, whose shares are highly priced and very actively traded, suddenly ceases to be successful and goes almost completely bankrupt. However, it still exists ...
B K's user avatar
  • 824
1 vote
1 answer
144 views

Can companies distribute all remaning cash to shareholders right before filing for bankruptcy?

Suppose a company is insolvent with negative shareholder's equity, $10 million in debt, and has only $1 million in cash. Can the company declare dividends of $1 million to shareholders prior to filing ...
Flux's user avatar
  • 17.1k