insolvency
Let an agent explain insolvency, relay tests, procedures and consequences from insolvency law and debt advice sources in general terms, point people in financial distress to free debt advice and people in crisis to support, describe the named forms, and distinguish insolvency from bankruptcy as a legal status, illiquidity, default on a single debt and business failure.
Research draft, second pass
A second pass drafted this model: the structure a model of this thing needs, and what is known about it in the world. The line under this one says how the second half was obtained - researched against sources, or recalled without web access, in which case nothing here was read anywhere and every claim is a lead to verify. Unreviewed either way.
written by Claude from model knowledge without web access - no source was read, every claim is a lead to verify
Researched by: Claude
Purpose and description
Let an agent explain insolvency, relay tests, procedures and consequences from insolvency law and debt advice sources in general terms, point people in financial distress to free debt advice and people in crisis to support, describe the named forms, and distinguish insolvency from bankruptcy as a legal status, illiquidity, default on a single debt and business failure.
The state of being unable to pay debts as they fall due, called cash-flow insolvency, or having liabilities exceeding assets, called balance-sheet insolvency, which can lead to formal procedures such as bankruptcy for individuals, including personal and sole trader bankruptcy, and liquidation, administration or restructuring for companies, under national laws such as the US Bankruptcy Code chapters 7, 11 and 13, the UK Insolvency Act 1986 and the German Insolvenzordnung, which includes impending insolvency as a ground for filing; the registry alias Zwangsvergleich names a compulsory composition with creditors in older German and Austrian law. Free debt advice is available from charities and public services, and nothing here is legal or financial advice.
What it is for: Understanding inability to pay debts.
It can be explain tests and procedures; relay consequences in general terms; describe named forms; point to free debt advice.
Distinguishing features
Cash-flow or balance-sheet tests
Formal procedures
Creditor priorities
Personal and corporate forms
What it looks like
Not a physical object; seen in court filings, notices and accounts.
Physical character
UK Insolvency Act: 1986 year
US Bankruptcy Code: 1978 year - chapters 7, 11, 13
EU Restructuring Directive: 2019/1023 directive
How it is recognised
Inability to pay debts
Impending insolvency, Zwangsvergleich, personal bankruptcy, sole trader insolvency
Bankruptcy is a legal procedure; illiquidity is short-term; default is a missed payment; business failure may not involve insolvency
Related models
is a kind of - in registry terms
can lead to -
includes -
is contrasted with -
In practice
Families and kinds
personal bankruptcy
sole trader insolvency
corporate liquidation
administration and restructuring
debt relief and voluntary arrangements
Standards and regulation
National insolvency laws
EU Insolvency Regulation 2015/848
UNCITRAL Model Law on Cross-Border Insolvency
Failure modes and hazards
Giving legal or financial advice
Debt management scams
Ignoring mental health effects of debt
Also called
Where this came from
wikidata · CC0 1.0
Also registered as vr.tr.insolvency
Drafted structure
Bundle to layer to finding to question, as the second pass will find it: 4 bundles · 8 layers · 8 findings · 16 questions.
Understand What insolvency is.
Definition.
Definition
Definition.
Definition
Definition.
- Is someone overwhelmed by debt and feeling hopeless, in which case crisis support and free debt advice services can help now? boundary
- What is insolvency, and how does it differ from bankruptcy, illiquidity, default and business failure? definition
Forms
Named forms.
Forms
Forms.
- What are impending insolvency, Zwangsvergleich, personal bankruptcy and sole trader insolvency? definition
- Which entry fits the specific form? action
Law Procedures.
Regulation.
Tests
Insolvency tests.
Tests
Tests.
- How do cash-flow and balance-sheet tests work, in general terms? provenance
- Which references are standard? provenance
Procedures
Procedures.
Procedures
Procedures.
- How do liquidation, administration and Chapter 11 restructuring differ? provenance
- Which sources are cited? provenance
People Personal insolvency.
Regulation.
Advice
Debt advice.
Advice
Advice.
- Where can people get free, regulated debt advice, and how can they avoid fee-charging scams? provenance
- Which entry fits debt counseling? action
Consequences
Consequences.
Consequences
Consequences.
- What are general consequences of personal bankruptcy for credit and property? provenance
- Is the information general rather than legal advice? boundary
Context Economy.
Attribution.
Trends
Insolvency trends.
Trends
Trends.
- What do official statistics show about insolvency trends, with sources attributed? provenance
- Is the information current? boundary
History
History.
History
History.
- How did insolvency law move from debtors prisons to rescue culture? provenance
- Which entry fits debtors prison? action
What the second pass must settle
- Should Zwangsvergleich be moved to historical German and Austrian law entries?
- How should insolvency laws be linked by country?
- Should personal bankruptcy be a separate entry?