Technical Bankruptcy

DEFINITION of 'Technical Bankruptcy'

The state of a company or person who has defaulted on a financial obligation and would be declared bankruptcy if the creditor makes a claim through the courts.

BREAKING DOWN 'Technical Bankruptcy'

In other words, a company or person experiencing technical bankruptcy shows all the signs of bankruptcy, but just hasn't been declared bankrupt by the courts.

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RELATED FAQS
  1. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  2. Can a 401(k) be taken in bankruptcy?

    The two most common types of bankruptcy available to consumers are Chapter 7 and Chapter 13. Whether you file a Chapter 7 ... Read Full Answer >>
  3. Are variable annuities protected from creditors?

    Whether your variable annuity is protected from creditors depends on the state in which you live. About three-quarters of ... Read Full Answer >>
  4. Does working capital include stock?

    A certain portion of a company’s working capital is generally composed of earnings; however, current short-term assets that ... Read Full Answer >>
  5. Will my credit score suffer from debt consolidation or refinancing?

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