The condition of a person or business that is insolvent; inability or lack of means to pay debts. Such a relative condition of a person's or entity's assets and liabilities that the former, if all made immediately available, would not be sufficient to discharge the latter. Under bankruptcy law, the condition of a person or firm that is unable to pay debts as they fall due, or in the usual course of trade or business. Financial condition such that businesses' or person's debts are greater than aggregate of such debtor's property at a fair valuation. American Nat. Bank & Trust Co. of Chicago, 111. v. Bone, C.A.MO., 333 F.2d 984, 987.
In general, state insolvency laws have been superseded by the Federal Bankruptcy Code (11 U.S.C.A.).
"Insolvency" under the Bankruptcy Code is defined in No. 101.
"Technical" insolvency is a situation in which a firm is unable to meet its current obligations as they come due, even though the value of its assets may exceed its liabilities. Under U.C.C., a person is insolvent who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they fall due or is insolvent within the meaning of the Federal Bankruptcy Law. U.C.C. No. 1-201(23)
@ insolvency proceeding
Any proceeding intended to liquidate or rehabilitate the estate of the person involved, including any assignment for the benefit of creditors and any chapter proceeding under federal bankruptcy law. U.C.C. No. 1-201(22).

Black's law dictionary. . 1990.

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