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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.

negative net worth
An excess of liabilities over assets. If the assets are fairly valued, a firm with negative net worth could sell all its assets and then be unable to pay all its outstanding loans. Thus, nothing would remain for the owners. Also called deficit net worth.


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30 via a debt-equity-swap scheme and other measures to prevent it from reporting a negative net worth amid expected hefty losses.
Fannie Mae's performance in the second quarter resulted in a negative net worth of $10.
Basically, "insolvent" means that you have a negative net worth -- that is, you "owe" more than you "own.
 
 
 
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