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Negative Net Worth |
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Deficit Net Worth A situation in which a person or company has more liabilities than assets. This may happen to a person if, for example, he/she owes more on his/her mortgage than the home is worth. A company may have a deficit net worth after consistently posting operating losses over an extended period of time. It is important to note that a deficit net worth does not necessarily mean that bankruptcy is inevitable, but it may prevent the debtor from receiving new credit necessary to maintain operations. It is also called negative net worth.
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