Online Bankruptcy Laws

Archive for the ‘Insolvency’ Category

Insolvency is a financial state in which a company is not able to pay its bills and other obligations on time. Insolvency usually occurs when the liabilities, or debts, exceed assets and income. The company must take immediate action to generate cash and settle or renegotiate current debts, once it becomes insolvent. Companies which cannot overcome insolvency often have to face bankruptcy proceedings, receivership, or liquidation of all assets.

Most often insolvency is puzzled with bankruptcy. Both insolvency and bankruptcy deal with liabilities beyond assets, but bankruptcy is a matter of law and insolvency is a state of being. Insolvency can lead to bankruptcy, but the condition may also be momentary and fixable without legal safeguard from creditors. Read the rest of this entry »