An Illustrated Guide to Corporate Failure

Traders and lawyers know when a company is about to go under. So should you.

Illustration: Cath Kastner

“Bankruptcy” is a dirty word in boardrooms, on trading floors and in ­employee break rooms. There’s good reason: Insolvency tarnishes reputations, wipes out stockholders and kills jobs. Thankfully, corporate failures are rarely surprising to those who know what to look for. Close observers fully expected the recent bankruptcies of coworking giant WeWork Inc. and pharmacy chain Rite Aid Corp. Almost 200 companies with debts of at least $50 million declared bankruptcy this year—the most since the global financial crisis, except for 2020, during the Covid-19 pandemic. The wave shows no signs of ebbing as high interest rates weigh down corporate balance sheets. So how do you know if a company is about to go under? Read on.

Stock, bond and loan prices are the quickest way to spot a troubled company. When brokers offer floating-rate loans for less than 80¢ on the dollar, there’s little doubt the borrower is struggling. That price means lenders don’t expect the debt to be repaid in full. Almost a year before Rite Aid

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Late on Chapter 13 bankruptcy payment. What now?

Key takeaways

  • The court could dismiss your case or change it to a Chapter 7 if you’re late on your payment.

  • You can request a payment reduction if you’ve been faced with an unexpected financial hardship.

  • If you miss a payment or think you could be late in the future, reach out to your bankruptcy trustee or your attorney immediately and let them know.

chapter-13/?mf_ct_campaign=aol-synd-feed&utm_content=syndication#:~:text=The%20Bankrate%20promise&text=Chapter%2013%20(also%20called%20a,from%20three%20to%20five%20years.” data-ylk=”slk:Chapter 13 bankruptcy;elm:context_link;itc:0″ class=”link rapid-noclick-resp”Chapter 13 bankruptcy, also known as reorganization bankruptcy, is a legal process that allows you to restructure debt to be more manageable. As part of the process, you will be required to pay creditors a portion of the outstanding debt over three to five years during what’s known as the repayment period.

At the end of the repayment plan, any remaining debt you have left will be “discharged” — meaning you are no longer responsible for paying it. In most cases, being a few weeks late on your Chapter 13 payments isn’t a problem, but delays of longer than a month can impact your chances of a successful discharge.

What happens if you miss a Chapter 13 plan payment?

Skipping a Chapter 13 plan payment can negatively impact

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