When do you know if you are insolvent?

Answer 1

Insolvency: basic criteria.(for business)

1. Can the business pay it's debts when they are called?

2. Does the business owe more (financially) than it owns?

3. Has the business been approached legally for financial reparations?

If any one of these is 'Yes' it is likely the business can be considered insolvent.

Answer courtesy of Forbes Burton - specialist in business closure.

Answer 2

You are insolvent when your total liabilities exceed your total assets, meaning you cannot pay off your debts. It is important to assess your financial situation by calculating your assets and liabilities to determine if you are insolvent.