Bankruptcy Financing


DEFINITION of 'Bankruptcy Financing'

Financing arranged by a company while under the chapter 11 bankruptcy process. Clearly, such financing is extremely high risk and is done at a relatively high interest rate.

BREAKING DOWN 'Bankruptcy Financing'

Sometimes referred to as "turnaround financing" or "debtor in possession financing". It can be very profitable to lend to companies that need money this badly, but at the same time, a lender runs a high risk of the creditor defaulting.

  1. Quick-Rinse Bankruptcy

    A bankruptcy proceeding that is structured to move through legal ...
  2. Moratorium

    1) A period of time in which there is a suspension of a specific ...
  3. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  4. Default Risk

    The event in which companies or individuals will be unable to ...
  5. Debtor-In-Possession Financing ...

    Financing arranged by a company while under the Chapter 11 bankruptcy ...
  6. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
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  1. What are the differences between chapter 7 and chapter 11 bankruptcy?

    Chapter 7 bankruptcy is sometimes also called liquidation bankruptcy. Firms experiencing this form of bankruptcy are past ... Read Full Answer >>
  2. Can Sallie Mae loans be consolidated?

    Sallie Mae loans can be consolidated with other federal loans, but not with private loans. For federal loan consolidation, ... Read Full Answer >>
  3. How does Sallie Mae disburse funds?

    Sallie Mae is the number one provider of financial aid and student loans in the United States, servicing over 25 million ... Read Full Answer >>
  4. Do Sallie Mae loans go directly to your school?

    Sallie Mae is the biggest provider of financial aid and student loans in the United States. The company operates as a private ... Read Full Answer >>
  5. Can Sallie Mae garnish my wages?

    Private lenders such as Sallie Mae can garnish wages. In the case of federal student loans, the government has the power ... Read Full Answer >>
  6. Can the IRS withhold your tax refund?

    If you have any outstanding federal tax or state income tax debts, the IRS may levy any federal tax refunds or state income ... Read Full Answer >>

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