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Insolvency means that a person or company cannot pay off their debts on their payment due dates. This could be due to a short-term lack of funds.
On the other hand, bankruptcy refers to when a court of law rules that person or company is legally unable to pay their creditors. Often, the bankrupt party has liabilities that far exceed their assets.
This can be the case where individuals have outstanding mortgage loans greater than their homes’ current market values. Another example is a property insurance company hit with an extraordinary number of liability claims worth more than the insurer’s total assets.
Find Lawyers, Attorneys or Law Firms in Maine. Attorneys at Law: Tom Hanson, Tonya Johnson, Tori Stenbak, Tracey Burton, Tracie Adamson. BANGOR
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