Budget airline Spirit announced its shutdown on May 2, 2026.

Chapter 7 is for liquidating personal assets to clear debts, Chapter 13 allows a repayment plan for individuals, and Chapter 11 lets businesses reorganize to stay afloat.

Some experts suggest airlines lose money on every flight. This video dives into how airlines have leveraged their loyalty programs to make billions of dollars, effectively evolving into banks.

However, the bankruptcy process does not apply to several types of common debt, including money owed toward child support or alimony payments. Most debtors also do not qualify for relief from student loan payments.

The technical term for what happens when a court removes a debtor’s obligation to repay money owed is “discharge.” An “automatic stay” is what goes into place once a filing occurs to prevent a debtor from facing lawsuits, evictions, and other negative consequences until the process wraps up.

Although the retailer may have failed financially speaking, some argue that longevity in itself is a success—the brand operated for over 130 years before that bankruptcy filing, after all.

Nearly all of its 26,000 employees immediately lost their jobs. But in London, a few hundred remained tucked away, working for another decade to wind down the bank’s European business.

However, there are actually six types in practice today. These less-common options can be lifelines for foreign businesses operating in the US, local governments, and farms and fisheries.

In March 2023, Silicon Valley Bank—the nation's 16th largest bank at the time—collapsed after a rapid run on its deposits. Among other factors, the bank had placed more than half of its investments into long-term bonds, leaving it without the necessary cash on hand as its clients, largely start ups, panicked and withdrew their money at the same time. This visualization lays out the timeline and impact of the collapse.

For years before that filing, the restaurant group had been operated by two different companies: one owned by private equity, and the other that includes the original founders.

Silicon Valley Bank—the 16th largest bank in the US—served many tech startups in the area as well as many venture capitalists. The bank collapsed in 2023—in a single day, bankers took out $42B.

Just before Sam Bankman-Fried declared FTX bankrupt in November of 2022, he sought to raise funds quickly to try to save the cryptocurrency exchange. As part of that attempt, he sent around a glimpse of the exchange's current balance sheet, which showed the company had liabilities of $9 billion with only $900 million in liquid assets. Check out the visualization here.

Some in the airport industry argue that charging street prices in airport restaurants isn't sustainable because it's more expensive to run a business inside an airport.

About 77% of American households had some debt at the end of 2023. However, when debt becomes crushing, it's time to consider a management plan or a bankruptcy filing. This calculator helps explore whether debt is manageable based on inputs like medical debt, payday loans, and gross annual income.

In 2024, a banking middleman called Synapse declared bankruptcy. Unfortunately, it also locked roughly 100,000 Americans out of their own money, which prompted a class action lawsuit.

Golden Gate Capital, a PE firm, bought Red Lobster in 2014 for $2.1B. Golden Gate then sold Red Lobster's real estate, more than 500 storefronts, which generated $1.5B in revenue and helped finance the PE firm's acquisition of the company. Analysts say increased debt, high rent costs, and low equity put Red Lobster in an impossible position, leading to its 2024 bankruptcy filing—although the shrimp bill probably didn't help.

Those who file for Chapter 7 must wait 10 years before the bankruptcy is removed from their credit report. For Chapter 13, the wait time is seven years.

Publicly traded companies don’t file for bankruptcy out of nowhere—there are typically warning signs in a stock’s performance, quarterly earnings calls, and US Securities and Exchange Commission filings.

In 1787, this founding document gave Congress the right to establish nationwide bankruptcy laws. Legislators took advantage of that power in 1800 when they passed the Bankruptcy Act of 1800, the first comprehensive bankruptcy law at the federal level.

While there are multiple types of bankruptcies, Chapter 11 is probably the one you've heard about the most. Technically speaking, Chapter 11 bankruptcy involves a reorganization of a business's assets and debts under court supervision. Companies such as Red Lobster, WeWork, and Party City have all filed for Chapter 11 bankruptcy in recent years. Learn more about it here.

After being acquired by two private equity firms and a real estate company for more than $6B in 2005, Toys 'R' Us filed for bankruptcy in 2017. Many point to the $400M a year the company had to pay to service its debt, as well as increased competition from online retailers like Amazon, for draining its profits and ultimately dragging it under.

At its peak, Sears was the largest retailer in the world, making elite objects accessible to the middle class. But in 2018, the company officially filed for bankruptcy due to massive debt and losses.

In the fallout of the Great Recession of 2008, Barclays bought several assets from the failed investment bank Lehman Brothers in a fire sale and maintained the company's trademark, despite the bank's collapse. Tiger Lily Ventures attempted to launch a whiskey line parodying the name, but the product was rejected in court due to questions over Barclays' maintenance of the trademark.

Chapter 7 is the most popular type of filing for individuals needing relief. However, to be eligible, debtors must pass an income means test. At the most basic level, they must prove that their average monthly income over six months is below their state’s median. But there are exceptions.

After World War II, the US dominated aviation, particularly Boeing. To compete, Europe's major industrial nations pooled resources to form Airbus, a customer-centric airplane manufacturer. Its A320 family of planes became the most popular in airliner history, leading to profitability in the 1990s. Amid Boeing's major hurdles in recent years, Airbus remains the industry leader.

An S-1 or prospectus is a registration form filed with the US Securities and Exchange Commission when a company wants to go public. They can be pretty juicy documents, as S-1s can reveal previously private details about companies to the public, often for the first time.

Risks in private credit investing include the industry's lack of transparency and the ability of businesses to borrow more than a bank might allow against their debt. Some borrowers in early 2026, for instance, likely did not expect interest rates to be so high for so long, which could be contributing to an uptick in defaults.

Roughly a quarter of the US federal government's spending must be approved annually through a set of 12 appropriations bills in Congress. When they aren't, a government shutdown ensues, where federal agencies are legally barred from spending any further money on nonessentials. This explainer covers the basics of government shutdowns and their impact on the broader culture.

Apple rolled out its own buy now, pay later service in 2023, but Apple shut it down the following year. Instead, Apple made changes to let its Apple Pay users make purchases and access installment loans through BNPL company Affirm.

It has done just that since 1800. This legislation, which outlines the various types of bankruptcy filings, has evolved over time. The most recent iteration is the Bankruptcy Reform Act of 1978, which introduced Chapter 11 filings in an effort to make the process easier for businesses and individuals.

There’s no shortage of potential culprits for Sears’ death, from hedge fund manager Eddie Lampert, to Amazon, to the 2008 stock market crash.

After years of being delayed by litigation, a 2024 US Supreme Court ruling upheld a law that prevents lenders from attempting to take payments from accounts with insufficient funds more than twice without reauthorization. This tactic is commonly used by payday loan companies, which technically require repayment on the day borrowers receive their paychecks.

The COVID-19 pandemic and increased competition post-2020 are just two factors plaguing the designer clothing rental company.

Debtors must know whether their liabilities are secured or unsecured and what type of assets they have. They also need to know what a filing can and can’t help them with.