definition of insolvent???

starbies

sorry if this sounds a bit dull - but having been stressing (as on previous threads!) about whether i'd be allowed to go br - i've just seen some replies on someone's thread - but now can't find them again- about defining being insolvent. if my creditors required minimum payments equal approx £750 pm - with 45k unsecured ooutstanding (oh's are approx £130pm) but as of nxt month we'll only have surplus income of £300 max - does this equal 'insolvent'????

starbies

kew63

On the face of it would say that it looks like you are, insolvant is simply you cannot afford to pay your debts.
But you must speak to one of the debt charities, they can go through your personal circumstances and help you find out what of the many options is suitable for you.
What works for one person isnt always right for another.

maxmycardagain

Insolvency means the inability to pay one's debts as they fall due. Usually used in Business terms, insolvency refers to the inability for a company to pay off its debts.

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent individual or organization).

http://en.wikipedia.org/wiki/Bankruptcy

debtinfo

Hi starbies

As said above the courts use the definitition for insolvency that "you cannot pay debts as they fall due" to apply for bankruptcy.

to give an example say your surplus is £100 pm after all essential living costs have been paid for.

1. You have a credit card with a balance of £10,000 which you have to pay a minimum of 2% each month. 2% or £200 is due this month so you are insolvent

2. If you have a credit card with a balance of £1,000 with a 2% minimum payment. 2% or £20 is due this month and so you are not insolvent.

3. The balance is £1,000, but you have missed a few payments and they have sent you a default notice. This means that the whole amount of £1,000 is due this month so you are insolvent.