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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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0 votes
3 answers
73 views

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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
3 votes
1 answer
180 views

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 ...
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 ...
1 vote
1 answer
74 views

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 ...
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, ...
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 ...
-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 ...
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 ...
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 ...
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 ...
1 vote
1 answer
321 views

What would happen if an hypothetical index funds bubble crashes

There are some finance professionals that have warned about an index fund bubble: Index funds bubble I'm assuming that, at some point, index funds will get into a bubble and this bubble will ...
72 votes
1 answer
10k views

My friend cosigned for a defaulted loan. Should he declare Chapter 7 bankruptcy?

Background: My friend Abe co-signed an auto loan for about $25k with his "friend" Bella, in the USA state of Maryland, about 4-5 months ago. The car was for Bella's use. The deal was that ...
8 votes
2 answers
923 views

Stocks and Bankruptcy

Trying to understand what happens when a company goes in and out of bankruptcy. I'll use American Airlines as an example because it's what I've been following for some years. In November 2011, AA ...
-1 votes
1 answer
111 views

Online 𝘱𝘳𝘰 𝘴𝘦 bankruptcy filing? [closed]

There are many online tax websites (e.g., TurboTax), but are there similar websites for helping one file for bankruptcy pro se (individually, without an attorney)? Note: I'm not looking for "...
1 vote
0 answers
120 views

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 ...
6 votes
2 answers
2k views

Bankruptcy and Mortgage Reaffirmation

I filed for bankrupcty in 2008 and it was discharged October 1, 2008. In the process, I was going to reaffirm my mortgage but I had a question regarding the terms. Before I knew it, the bankruptcy ...
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 (...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
2 votes
3 answers
514 views

What does "burned through $300 million" mean?

In the book "Antifragility of Islamic Finance: The Risk-Sharing Alternative" by Umar Rafi and Abbas Mirakhor, on page 101 I read the following line: Pets.com, the poster-child company of ...
0 votes
2 answers
266 views

What happens to a short position when a company is nationalized?

The title speaks for itself. Would this be the same as shorting a company that goes bankrupt? So you basically get to keep all your money?
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 ...
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 ...
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 ...
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-...
3 votes
1 answer
554 views

Is NDC.org a legitimate way to track Chapter 13 cases?

I was told by the secretary of the lawfirm that's handling my Chapter 13 case to go to ndc.org to find out details such as how many remaining payments I have. I know a thing or two about technology, ...
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 ...
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 ...
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 ...
18 votes
2 answers
3k views

What does Chapter 11 Bankruptcy mean to an investor holding shares of a Chapter 11 Company?

If I currently have shares in a company that has filed for Chapter 11 bankruptcy protection what impact does this have on me? Does this mean the shares stop trading? If the company successfully ...
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 ...
-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 ...