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What's the difference (if any) between "to go under" and "to go bankrupt" in the following sentences? 1- His company has gone under! 2- His company has gone bankrupt!

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To go under means to deliberately shut down a business as a failure, especially due to lack of revenue.

To go bankrupt is a formal legal process where a business (or a person) declares that they are unable to pay back all of the debts that they owe. The courts may then require them to sell off certain assets and use the proceeds to pay back some of that debt, while other debts may be forgiven and never paid back (which is why some corporate bonds trade at lower than face value - because of the risk that bankruptcy may erase the guarantee).

These two events are often correlated - a business might begin the process of going under by declaring bankruptcy, but they are not the same thing and do not always both happen at the same time.

For example, a business might go under because the owner decides that it's no longer profitable, but they may have enough assets (either in the business or personally) to pay down their debts without needing to formally declare bankruptcy.

Likewise, the process of going bankrupt and dealing with bankruptcy court does not necessarily mean that the business ends - sometimes it may continue operating, perhaps by offering some of its creditors a share of the ownership of the business, for example, and emerge from bankruptcy without going under.

Here is a list of eight famous companies that declared bankruptcy, but ended up profitable in the long run. That is, they did not go under.

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  • I agree. For a business to go under doesn't necessarily mean it is filing for bankruptcy. "Going under" to me just means the business is not doing great, or "under water"
    – Eddie Kal
    Nov 10 '20 at 21:40
  • Actually, I think it mean the business fails, not just does badly. See Collins dictionary: "If a business or project goes under, it becomes unable to continue in operation or in existence. " Nov 11 '20 at 2:49
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"Gone under" is a metaphorical description of business failure, comparing it to drowning by going under the surface of the water. "Go bankrupt" is a possible legal recourse of a business that fails.

As pointed out in the comments and the other answer, I was wrong to say the terms mean the same. "Gone under" means that the business failed completely, one way or another. "Bankrupt" means to take legal action (of various kinds, described as chapter 11, chapter 13, or whatever) to discharge debts or dispose of assets of a company that has failed.

Thanks for the corrections.

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  • I'm not convinced it's valid to say a business "went bankrupt" - I think only people can be declared bankrupt. Being bankrupt is like being married - it's part of a legal process. You can't just declare yourself married or bankrupt , nor can you become bankrupt outside of the legal context. But metaphoric "going under" just means you (or your company, business) stopped trading because you weren't making enough money. Nov 10 '20 at 18:23
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    @FumbleFingersReinstateMonica - Businesses can certainly file for bankruptcy. Moreover, some bankruptcy proceedings involve debt restructuring and eventually, the continued survival of the business, so it's entirely possible for a business to go bankrupt without also going under. Marvel Entertainment went bankrupt in 1996 but it certainly never went under and now it's stronger than ever. Nov 10 '20 at 20:05
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    @CanadianYankee: What is Company Bankruptcy, in the UK? Though you may have heard stories of “companies going bankrupt”, this applies to US companies. In the UK, a company cannot “go bankrupt”, instead it enters liquidation. Nov 11 '20 at 17:55
  • (I wasn't "convinced" before, but obviously this is just a US/UK distinction.) Nov 11 '20 at 17:56
  • @FumbleFingersReinstateMonica I've heard in the UK it is called "administrative receiver". Isn't there a verb for the process? I remember hearing something like "The company has been received" or "put under administration".
    – Eddie Kal
    Nov 13 '20 at 5:22

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