Many companies around the world are affected by bankruptcy at some point in their financial year. When a company is declared bankrupt, it can no longer invest in the stock market. The government declares the company insolvent. An example of such a company is Lehman Brothers, a housing and real estate company that went bankrupt in 2008. Below is a visual aid of the event that led the company to bankruptcy. This subsequently impacted the business and as a result, caused the company to file for bankruptcy. Before we look at the consequences of Lehman Brothers declaring bankruptcy, we must also consider the factors that brought this about. irregular by historical standards. From March 1997 to June 2006, Sheller and Case's National Housing Index showed that prices increased every month except for just two months. This sustained price gave many aspiring owners the illusion of hoping that prices would drop within a few months. As the table shows, the reason is not only due to a good economic situation, but also to the constant increase in real estate prices. First-time homeowners pay more on their mortgage as the equity in their home increases. Second, there was the accessibility of pioneering mortgage loan prospects that allowed buyers to acquire homes whose credit payments they could not maintain on a stable basis, as well as the possibility of constantly refinancing them at higher prices . This led to a deterioration in the lending rate as conditions were favorable. (Ariccia et al, 2008). This is due to increased competition between lenders. The massive amount of emissions added by a medium of paper......foreign and local to invest in. This will still allow the company to make good profits and greatly avoid the effects of being insolvent, thus saving many people from unemployment. Works Cited Efraim and Jennifer Dlugoszb, 2008, “The Alchemy of CDO Credit Ratings”, Harvard University Working Paper. Dell'Ariccia, 2008, Credit Booms and Lending Standards, Evidence from the Subprime Mortgage Market, CEPR, Discussion Paper No. DP6683. Diamond, D. and P. Dybvig, 1983, “Bank run, Deposit Insurance and Liquidity”, Journal of Political Economy Demyanyk, Yuliya and Otto Van Hemert, 2008, “Understanding the Subprime MortgageCrisis”, working paper. Dolan k, 2008, Ultra-short-term bond funds take massive hit, Moningstar.comDuffie, Darrell, 2004, Compelling reasons for better credit rating models, Financial Times, April 16, 2004.