[Vocabulary] insolvent/bankrupt

[euncu]

Hello,

Is there any difference in meaning between the words "bankrupt" and "insolvent" ?

Thanks for your answers in advance.

 

[Nicklexoxo]

Hello.

I have found it:

Insolvency is defined as a financial condition or state experienced when:

1. A legal entity* or a person’s liabilities (debts) exceeds their assets, commonly referred to as 'balance-sheet' insolvency; or

2. When a legal entity* or person can no longer meet their debt obligations on time as they become due, commonly referred to as 'cash-flow' insolvency.

Bankruptcy is defined as a successful legal procedure that resulted from:

1. An application to the relevant court by a legal entity* or a person in order to have themselves declared bankrupt; or

2. An application to the relevant court by a creditor of a legal entity* or a person in order to have the legal entity* or person declared bankrupt; or

3. A special resolution which a legal entity* files with the Registrar of Companies in order to be declared bankrupt.

(* legal entity: Close Corporation or Company )
Be aware that I am not a native speaker nor a teacher.

 

[euncu]

Hello Nicklexoxo,

Thanks for the answer. So what you mean is as follows (I'm going to put it roughly);

Insolvent is being broke but bankrupt is being declared broke.

Am I right?

 

[Raymott]

Hello.

I have found it:

Can you say where you found it? If you're going to cut and paste information like this, then i) we should be told where it came from and ii) the people who wrote it should be acknowledged.

 

[Nicklexoxo]

The link seems strange, but I found that infromation there.

 

[euncu]

Hello Nicklexoxo,

...So what you mean is as follows (I'm going to put it roughly);

Insolvent is being broke but bankrupt is being declared broke.

Am I right?

My question still stands; Would someone please give me a clear answer?

 

[Chicken Sandwich]

Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.
Insolvency - Wikipedia, the free encyclopedia

Bankruptcy is not the only legal status that an insolvent person or other entity may have, and the term bankruptcy is therefore not a synonym for insolvency. In some countries, including the United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings (such as liquidation and administration) are applied to companies. In the United States, bankruptcy is applied more broadly to formal insolvency proceedings.
Bankruptcy - Wikipedia, the free encyclopedia

 

[SoothingDave]

My question still stands; Would someone please give me clear answer?

Yes, your understanding is correct. Insolvency is when you don't have the assets to pay your creditors. Bankruptcy is when you are given legal protection from your creditors.