What is the difference between bankruptcy and insolvency?
Difference between bankruptcy and insolvency
At a conceptual level, Bankruptcy and Insolvency both mean the same thing.
The technical legal definition of Bankruptcy and Insolvency varies between jurisdictions. In Australia it means that the person cannot pay their debts as and when the debts fall due.
Commonly the distinction in Australia will depend on the identity of the ‘person’.
If a natural person, the individual will be considered to be Bankrupt.
If the ‘person’ is a company or other corporate entity, they will be called Insolvent.
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