What happens to bank loans in case the debtor company goes insolvent?

Question by Syed Nadim: What happens to bank loans in case the debtor company goes insolvent?
I would like to know the fate / process of recovery of bank loans in case the debtor business goes insolvent / bankrupt with particular reference to UK laws. What could be the precautions which a lending banker may take while lending to ensure recovery in case of insolvency / bankruptcy?

Best answer:

Answer by GetOutofDebt.org
If it is a debt you owe the company, you still owe it. The precaution is good qualification and an appropriate interest rate based on risk to price comparable loans at a rate where the estimation of profit exceeds the estimation of loss. That’s how banks make a profit.

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