Law · Legal Information · Justice
 

Insolvent

A person not able to pay his or her debts as they become due.

In Dewey v St. Albans Trust, Justice Rowell wrote:

"The term insolvency is not always used in the same sense. It is sometimes used to denote an insufficiency of the entire property and assets of an individual to pay his debts. This is its general and popular meaning.

"But it is also used in a more restricted sense, to express the inability of a party to pay his debts as they become due in the ordinary course of business."

Thus, in the Sale of Goods Act 1979 (United Kingdom), an insolvent person is described as follows:

"A person is deemed to be insolvent within the meaning of this Act if he has either ceased to pay his debts in the ordinary course of business or he cannot pay his debts as they become due, whether he has committed an act of bankruptcy or not."

Usually, insolvency is a prerequisite to an application for bankruptcy protection.

REFERENCES:

Are we missing anything? If you think there is a term that should be included, please send us the suggestion

  • Dictionary
  • Resources
  • LawMag

Latest LagMag headlines:

H1N1 Law - Swine Law for a Swine Flu

In a state of public health law anarchy, professional hockey players receive a killer flu vaccine while infants and pregnant women wait.

The Death of the Common Law: Expiry date, 2100

Just about now, but for the economic might of the United States of America, the last funeral bell tolls of the common law would be fading.

Gretzky Law

The recent Phoenix Coyotes debacle, in which he left behind his job, is not the only time Wayne Gretzky has had to leave from the side exit of a courtroom.


Read earlier headlines »
Subscribe to stay in touch »

Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

top