Bankruptcy Data

What is bankruptcy data?   

Bankruptcy data presents complete details about the legal status of a company as a result of its declared bankruptcy. Companies declare bankruptcy and are either liquidated or reorganized. They file for bankruptcy to eliminate or repay their debts in full or in part, as directed by the bankruptcy court.

This type of data includes public information about debts, creditors, and financial statements. It may also include additional details about the company’s finances.

Companies use the data for evaluating potential business partners before deciding on business deals. Bankruptcy data also serves as a reference for best practices when starting new ventures.

Where does the data come from?      

Bankruptcy data comes from various sources, and the chief source is government records. The government database provides accurate bankruptcy data which you can augment with data from other reliable sources.

Media houses are also good sources for this data, as businesses going bankrupt become public information. They have information available in news coverage, journals, magazines, and broadcast archives. As bankruptcy is a legal procedure, the related data is also part of the court records.

What types of attributes should I expect when working with this type of data? 

This is a type of legal data and has typical attributes available in legal proceedings. The attributes include entities that have recently filed for bankruptcy with the company name, the date and place of the bankruptcy declaration, its current status, and the individuals involved.

It can also include information about the proceedings, such as the presiding judge, attorneys, plaintiffs, defendants, rulings, the conditions in which the bankruptcy suit was filed, and other relevant details.

If the data spans a long time period, it will have more attributes, such as the specific bankruptcy procedure and the scope of the debts. If the companies declaring bankruptcy have made repayments, the records may also include the complete details of repayments.

How should I test the quality of the data?     

To test the quality of the data, focus on the reliability of sources. Government databases typically provide high-quality data that is accurate, complete, and regularly updated. The timeliness of data ensures that the informed decisions you make are trustworthy. 

As the data is sensitive and may also include personally identifiable information (PII), bankruptcy data must be compliant with region-specific privacy laws and regulations.

To test the quality of the data:

• Verify that the data is accurate and correctly presents the current status of the companies.
• Ensure that the data is frequently updated and complete.
• Validate that the data is privacy-compliant.
• Test with a sample to see if it meets your requirements.

Who uses the data?       

Evaluating and avoiding the risks of doing business with companies that have been through bankruptcy is a standard business practice.  Companies planning to sign a business deal use this data for vetting the potential partners.

Lawyers use the data for court and legal proceedings about the specific company. It provides insights and references about the past legal proceedings to assist in handling present and future cases. This data also gets used in legal analytics and academic research in law.

New ventures use bankruptcy data to learn from the mistakes of other companies and not fall into the same traps.

It can also be used to augment other types of company data for profiling and evaluating companies.

What are the common challenges when buying bankruptcy data?        

Bankruptcy data contributes to understanding the creditworthiness of companies. This data must be current to ensure that the credit assessment of the companies is accurate.  As vendors source this data from government and court records, it may contain sensitive data – privacy and compliance can be common challenges. 

• Source credibility: When a vendor sources data from multiple sources besides government and court records, credibility can be a key challenge. 
• Compliance: Bankruptcy data may contain personally identifiable information (PII), and it must comply with all the region-specific privacy regulations such as GDPR and CCPA.
• Data completeness and timeliness: The bankruptcy data from a vendor must incorporate the recent records of companies to ensure that the information present is not misleading. Data timeliness is a challenge as some records take time to be available, while some old records may not be complete.

What are similar data types?

Bankruptcy data is similar to other types of data used in legal analytics, such as Litigation Data and Court Data. It can also be used along with Patent Data, and Trademark Data, and Intellectual Property Data.

You can use bankruptcy data with funding information and other types of company data for evaluating companies.  

You can find a variety of examples of B2B and company data in the Explorium Data Catalog.

Sign-up for Explorium’s free-trial to access the data available on the platform.                 

What are the most common use cases?      

You can use bankruptcy data for B2B credit risk modeling, creditor profiling, customer profiling, and investment screening among other cases.  Bankruptcy data is also used for legal proceedings and legal analytics.

• B2B Credit Risk: Companies supplying goods and services to other companies work on credit. B2B credit risk assessment drives the decision on extending credit based on the ability of the company to pay on time. The risk assessment takes into account several factors, such as the financial health and the credit history of the company. Businesses use bankruptcy data to evaluate a specific company and mitigate the risk of late payment or non-payment. 
• Portfolio Management: Managing investments with long-term financial objectives requires exhaustive analysis for reducing risk and improving returns. Availability of a wide variety of data coupled with machine learning modeling drives portfolio management today. Bankruptcy data contributes to other financial data in powering the models for investing in stocks, mutual funds, bonds, or other investment instruments.
• Legal Analytics: Similar to business analytics, legal analytics uses data analysis technologies to derive actionable insights and achieve higher efficiency. Bankruptcy data contributes to other types of legal data to power legal analytics. Legal firms use the analytical results to drive profits and gain a competitive advantage.

Which industries commonly use this type of data?                

Bankruptcy data is used by practically all industries, including retail, eCommerce, manufacturing, hi-tech,  consumer goods or CPG, banks, insurance, and financial services.         

How can you judge the quality of your vendors for bankruptcy data?

Bankruptcy data needs to be complete and accurate, which demands careful evaluation of your vendors and reliability of their sources.

• Interacting with vendor reps: Direct interaction or discussion often brings out the challenges of vendor quality. It would be a good idea to discuss your requirements and the expected data quality.
• Demo: Several vendors offer demos to help you understand and evaluate the quality of data they offer. You can use this opportunity to check the attributes and ascertain if they match your requirements.
• Customer reviews: You can explore customer reviews on vendor websites for the quality and reliability of data offered.
• Success Stories: Case studies and success stories always help to assess vendor quality. Successful projects often describe the way vendors engage with customers to solve their specific pain points.