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.

RELATED TERMS
  1. Debtor-In-Possession Financing ...

    Financing arranged by a company while under the Chapter 11 bankruptcy ...
  2. Chapter 10

    A type of corporate bankruptcy filing in the U.S. Chapter 10 ...
  3. Chapter 7

    A bankruptcy proceeding in which a company stops all operations ...
  4. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  5. Chapter 15

    A chapter under the U.S. Bankruptcy Code, added to foster a cooperative ...
  6. Debtor In Possession - DIP

    An individual or corporation that has filed for Chapter 11 bankruptcy ...
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    I filed for bankruptcy 10 years ago in November. Firstly, I do not know which category I applied for. ... Read Answer >>
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