Talk:Insolvency

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--208.228.181.183 (talk) 11:47, 25 April 2008 (UTC)

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US v UK usage[edit]

I seem to recall Insolvency has a specific meaning in the U.K that is more akin to U.S. Bankruptcy than is stated by the the US-centric dictionary definition in this article. Flawiki 01:36, 28 Dec 2004 (UTC)

The UK/US use the same terms of art - but in different ways - we need to be clear what we are defining - I suspect that we have a clear US page - which is simply incorrect in the UK - perhaps we need to split it into regional areas - tagging what we have as US (or whatever) - and then opening up a new UK etc section as appropriate. Brookie 09:10, 8 Mar 2005 (UTC)

Given the important differences I think it would be grand if the article were sectioned or even refactored into jurisdictions or in whatever way could make it more useful to UK users who I suspect are not now adequately served by the USian orientation. I, for one, would welcome its major rework towards that end as it strikes me as being terribly important that en.wiki appeal to all English speakers, not just those on the southern part this side of the pond. Flawiki 05:08, 9 Mar 2005 (UTC)
Agreed. However I felt it worthwhile to add the UCC definition of the term to the article, perhaps as a prelude to refactoring. Ellsworth 23:54, 3 November 2005 (UTC)


Questionable definition[edit]

I don't think the definition of insolvency in this article is quite right. Having liabilities that exceed your assets isn't good, but doesn't neccessarily mean you're insolvent. Students that work their way through university on student loans usually have a negative net worth, upon graduation, but it wouldn't be correct to say they're insolvent. They would become insolvent if they were unable to pay their obligations as they became due. --142.242.2.248 19:08, 5 January 2006 (UTC)

No, liabilities greater than assets is known as balance-sheet insolvency, and unable to pay debts when due is known as cash-flow insolvency (I've put these in the article). The latter is usually the grounds on which a creditor will force a debtor into a formal legal insolvency proceeding, but the former is normally the grounds when a debtor chooses to enter such a procedure themselves (but they don't have to of course).--Cuddlyopedia 11:13, 11 Janaury 2006 (UTC)
Most dictionaries I've read tend to use "balance sheet" insolvency as the definition, however the cash-flow definition would be more accurate for insolvency in the real world. There's an Australian Court decision which declared a company is insolvent if it is unable to pay it's debts as and when they fall due.--DementedFreak 23 Janaury 2006

administrative receivership[edit]

Could someone who knows company law confirm that in adminstration and in administrative receivership are indeed the same thing, please? (see also talk:Administration). --Concrete Cowboy 21:02, 22 September 2006 (UTC)

This is now a separate article (with the question answered) at Administration of an insolvent business‎. --Concrete Cowboy 00:59, 10 January 2007 (UTC)
This separate article has been renamed to Administration (insolvency) --Concrete Cowboy 00:13, 11 February 2007 (UTC)

Need to restructure this article by jurisdiction[edit]

It is a rambling mess at present, with different editors contradicting each other. It really needs separate sections for each of US,Candada, SA, Australia, UK and so on. --Concrete Cowboy 01:17, 23 March 2007 (UTC)

Move article to solvency and combine[edit]

We don't list Ingratitude alongside Gratitude, nor do we list Inhospitality as well as Hospitality. Insolvency is the opposite of solvency and so, following established patterning, the article should be moved to solvency with an appropriate redirection page.

Insolvency is the far more important term. And in usage, solvency has a not-exactly opposite meaning. This proposal does not make sense.--Gregalton 04:09, 23 July 2007 (UTC)
Absolutely. --Concrete Cowboy 12:23, 23 July 2007 (UTC)

Interesting definition here[edit]

'Insolvency is a financial condition experienced by a person or business entity when their assets no longer exceed their liabilities'.

Er, how can assets exceed liabilities, or liabilities exceed assets? (Hint: Why is a balance sheet called a 'balance' sheet?) edward (buckner) 07:55, 19 September 2007 (UTC)

The balance sheet of an nominally insolvent company doesn't balance (the same of a company insolvent on a cash flow basis may do). A balance sheet shows the following:
Assets = Liabilities + Capital
For a limited liability entity, capital cannot be a negative number, because the owners of the entity are not liable for the deficiency in the entity's assets in respect of their ability to satisfy the entity's liabilities (whether that be through their illiquidity or their insufficient value). HJW (talk) 19:47, 15 November 2010 (UTC)

Preferences[edit]

As stated in this article, the distinction between UK and US law is entirely incorrect. I don't know whether the statement about UK law is accurate, but in the US, payments to creditors may be voidable if made (1) while the debtor is insolvent; and (2) within 90 days of bankruptcy filing or within one year of filing if the beneficiary is an insider. Thus, in the US, both insolvency and the date of filing are relevant. See 11 U.S.C. 547(b). Also, such payments are not problematic if the creditor is secured for an amount greater than or equal to the payment. Id. The article also muddles the distinction between gifts and payments to creditors. Payments to creditors are generally regulated by section 547 of the bankruptcy code, while gifts are regulated by section 548 and state law (usually the Uniform Fraudulent Transfer Act). Section 548 can be used to void gifts made while the debtor was insolvent or gifts that render the debtor insolvent, but only if they are made within 2 years of filing. Again, insolvency and date of filing are relevant. The section about preferences should either be revised so that it is not completely inaccurate, expanded to reflect the differences between fraudulent conveyances and preferential treatment, or deleted. Alternately, the article could link to a separate section on these issues.--Nate2700 (talk) 15:56, 29 December 2007 (UTC)

It would be great if you could do just that please. We can't allow the article to stand if you know that it is wrong. --John Maynard Friedman (talk) 01:53, 30 December 2007 (UTC)

Section on Costs of an IVA removed as it is covered in the Individual Voluntary Arrangement page in context and is a UK specific item MrGWilson (talk) 11:28, 11 January 2010 (UTC)