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Explain me the difference between Bankrupt and Insolvency
Accountancy
Is both mean the same I'm little confused help me frnds
Answers (6)
Insolvency : here you are not in the state of paying the debts like bills payables and short term loan currently. That is the profit became less and all your money gone for business,etc... Bankruptcy : you have taken a long term loan from the bank for a huge amount. You can't able to close that loan on the given time. Which means you can't pay that huge amount of loan. Now that bank has a rights to sell your property. And they will sell your property and pays your debt. If the debt is not closed even all your properties are sold, then the bank will give a notice. And this ia called the state of bankrupt. In solvency, it is not compulsory to sell the assets and pay debts. But in bankruptcy the bank will sell your assets.
main difference between insolvency and bankruptcy Insolvency refers to situation Bankruptcy refers to legal state If you're insolvent you're simply not in the state to pay off your dents If you are declared bankrupt then you have to pay off your debts by either selling off your assets or by restructuring payment process with government help
Insolvency is when an individual or entity is unable to meet the financial obligations as they are due for payment. Bankruptcy is a situation when the court of law has declared the insolvency of a person or entity and passed orders for its resolution, i.e. the property of the bankrupt is disposed off, so as to pay creditors.
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