Financial Crisis Understanding Bankruptcy - 1099 Words

In an economy where there are financial ups and downs it is hard for companies to strategize a successful long lasting plan. There are many companies that have had great successes while others have had and lost. For those companies, a loss usually meant riding the wave to bankruptcy, a stigma which meant death in the financial world. Today, bankruptcy is sometimes used as a strategic move within the business world breaking free from financial burdens to start anew. This financial â€Å"get out of jail free card† has taken on a few changes over the years. Along with the history of bankruptcy there are different approaches or chapters with each method of filing, reasons for bankruptcy, and affects associated with both the debtor as well as the creditor. Bankruptcy’s inception goes back to the Old Testament days in the Bible referencing Deuteronomy 15:1-2, â€Å"At the end of every seven years you must cancel debts this is how it is to be done. Every creditor shall cancel the loan he is made to his fellow Israelite. He shall not require payment from his brother, because the Lord’s time for cancelling debt has been proclaimed.† The purpose for bankruptcy was enacted by Congress through the court system to give people an opportunity to repay or wipe out their debts in order to get a â€Å"fresh start (How Did Bankruptcy Start?, 2011).† Following the proceedings, there would be a filling recorded against one’s credit report not to be removed until the end of seven years, the timeShow MoreRelatedThe Collapse Of The Lehman Brothers1638 Words   |  7 PagesThe global financial crisis of 2008 that reeked havoc on most of the financial institutions had them fall into liquidation and bankruptcy. One of the most popular and most debated incident was the failure of the Lehman Brothers. The Lehman Brothers were a leading US investment bank that was worth $600 billion (D’Arcy). The global financial crisis prompted Lehman Brot hers to close its leading subprime lender (BNC Mortages) in 23 locations (). The closing of these locations were so aggressive thatRead MoreFinancial Crisis And Its Effects On Financial Institutions1680 Words   |  7 PagesThe financial crisis in 2007-2008 in the United States was one of the greatest financial depressions the country has ever faced after the Great Depression. The paper gives out the details of the chain of events which led to the crisis to occur. I discuss the main actors and institutions involved in the crisis. The impact of the crisis on financial institutions, small and large businesses and at an individual level is discussed.. The government and major financial institutions had to take variousRead MoreFinancial Crisis And Its Effects On The Economy1337 Words   |  6 PagesFinancial crisis can be profoundly described in the example of the subprime financial crisis in the US. 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Several documentations and research regarding the recession have been made to make a better understanding of the economic downturn in 2008 as well as the global economy as a whole. The book used as reference in this essay, the Diary Of A Very Bad Year : Confessions of an Anonymous Hedge Fund Manager, captured the events corresponding to the length ofRead MoreKindlebergers Crisis : Financial Crisis1385 Words   |  6 PagesKindleberger’s Crisis Financial crises seem foreign to our thinking, something faraway, irrelevant in the context of modern society. But in truth, it is a very real phenomenon that had impeded the progress of nations and, many times, driven their victims toward bankruptcy and financial dependence. For this, its significance calls for analysis, as a means to understanding and, more powerfully, prevention and alleviation. Hence, the subject of this paper is to (1) describe a model, particularly, Minsky’sRead MoreEssay about Economic Downfall: State Bankruptcy883 Words   |  4 Pagesforced a couple of municipals to file for bankruptcy. Technically a state cannot file for bankruptcy because it is recognized by the Constitution as sovereignty, but cities or municipals in states can accord the Bankruptcy Code Chapter 9. Before the Bankruptcy Code, there was the Bankruptcy Act of 1898 and was replaced by the Bankruptcy Code in 1978. The Bankruptcy Code of 1978 has been revised four times and it is a rev ision of the Bankruptcy Act. The Bankruptcy Code was first enacted in October 1, 1979Read MoreBankruptcy Among Youth1748 Words   |  7 Pages1.0 Introduction Bankruptcy becoming the issues toward many youth nowadays. The worst is the bankruptcy was involves with many youth where below than age 30. According to Credit Counselling and Management Agency in New Straits Times (2011), an average of 41 Malaysians are declared bankrupt daily, with the majority failing to make repayment for car purchase loan. In short, the problem of bankruptcy among youth has to be taken seriously. 2.0 Problem Statement Statistics by the AKPK indicated thatRead MoreResearch Note On Distressed Debt1503 Words   |  7 PagesResearch Note on Distressed Debt Distressed securities are securities of companies or government that are experiencing distress (either in financial or operational terms), default, or even bankruptcy. In case of debt, this is called distressed debt. Investing in distressed debt can result in big returns, but the downside is that when a company goes completely bankrupt, the value of your securities can go to zero. Distressed debt sells at a very low percentage of par value, for example 30 cents