What is the difference between insolvency and Bankruptcy?

Question

What is the difference between insolvency and Bankruptcy?

Answer 1

bankrupcy is the result of insolvency. You need to file papers to be officially bankrupt, due to being unable to pay your debts (insolvent). Be advised, bankrupcy laws have changed and it is much more difficult to get a court to grant you bankrupcy, and depending on your situation, you may still have to repay everything you owe, you'll just have more time to pay. Hope i helped.

Answer 2

There is often a confusion that implies sameness between insolvency and bankruptcy. The words are often used interchangeably when in reality they mean different things. Although similar in nature, bankruptcy and insolvency are not equal concepts. In the first place, bankruptcy is normally a term reserved for individuals while insolvency is applied to businesses. Either way, the cashflow has reached a point where liabilities are greater than assets. The individual or business is unable to meet financial obligations and can no longer continue to function. Individual bankruptcy and business insolvency are both avoidable in almost every single case