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Monday, October 19, 2009
12:23 PM TweetThis
  • A new study finds a disconcerting trend in bankruptcy filings: More than 50% of small business bankruptcy filers were current with one or more of their lenders when they threw in the towel. The speed and silence with which they're going under is deeply worrying to lenders, who historically have managed default risk by closely monitoring delinquencies.
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This news story has 2 comments:

  •  
    That's happening in personal bankruptcy cases as well. I'm familiar with one case in which the debtor was current on all his debts, yet filed bankruptcy and discharged $98,000 of unsecured loans and credit cards.

    None of the lenders had any inkling because everything was current.
    Oct 19 01:03 PM | Link | Reply
  •  
    I think the reason is that creditors have been extremely aggressive in quickly seizing assets, especially liquid assets. The business stands a better chance of surviving bankruptcy if it can preserve its liquid assets.
    Oct 19 02:40 PM | Link | Reply
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