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The difference between bankruptcy and insolvency can be confusing. However, its important to understand the distinction, especially if you own or run a company.
Keep reading to take a look at insolvency and explore how it differs from bankruptcy.
What Is Insolvency?
Insolvency refers to an individual or companys inability to pay debts when they fall due. In an insolvent situation, the party assets are insufficient to discharge outstanding monetary obligations at the creditors demand.
In other words, an individual is considered insolvent when their current assets do not exceed their total liabilities and obligations.
For instance, lets say a company owes $1 million but only has…
Read the full article at: https://www.gobankingrates.com/money/business/what-is-insolvency/
