What happens to bonds when a company goes bankrupt?
Jan Meriss Alfonso Assistant at Ascent Law LLC If you are wondering what happens to your bonds when a company goes bankrupt, you're not alone. In fact, most people have been wondering about this issue for years. It's important to understand that not all debts are treated equally, and some bondholders have had a very poor experience when a company goes bankrupt. If you are concerned about the fate of your bonds, you can learn more about the different options you have. Secured creditors minimize risks Secured creditors are those who are backed by collateral when extending credit to a company. This helps them minimize their risks when a company goes bankrupt. In addition to being protected by collateral, they are usually paid first in the event of a bankruptcy. However, in some circumstances, the debtor may not be able to make payments in full. If this happens, secured creditors may be able to recoup a portion of their money. Secured creditors should pay attention to intercredit...