What is Bankruptcy and Insolvency
A bankrupt is a person who is officially confirmed by a Court that he is unable to pay off what he owes.
Therefore, a person may face bankruptcy if he owed too much money to the extent that he is unable to meet the payment requirements of his creditors.
Insolvency describes a situation when someone (an individual or a company) can’t pay what they owe on time; or the value of their assets is less than the money they owe.
There are different types of formal insolvency procedure for individuals (personal insolvency) and companies (corporate insolvency)
In insolvency, the person who owes money is often referred to as the debtor; those who are owed money are referred to as creditors.