Insolvency - Definition - Law Dictionary Home Dictionary Definition insolvency

Definition :

Insolvency, the state of one who has not property sufficient for the full payment of his debts. An insolvent, as distinguished from a bankrupt, was an insolvent who was not a trader: for until the passing of the (English) Bankruptcy Act, 1861, only a trader could be made bankrupt in the sense of obtaining an absolute discharge from his debts, while the future estate of an insolvent remained liable for his debts even after his discharge. The Acts from time to time in operation for the relief of insolvent debtors were 53 Geo. 3, c. 102; 1 & 2Vict. c. 110, ss. 23-120, 5 & 6 Vict. c. 122; 7 & 8 Vict. c. 96; 8 & 9 Vict. c. 127; 10 & 11 Vict. c. 102; and the (English) Bankruptcy Act, 1861 (24 & 25 Vict. c. 134), s. 230. By the (English) Bankruptcy Repeal and Insolvent Court Act, 1869 (32 & 33 Vict. c. 83), all the enactments on this subject theretofore existing were repealed, and provision was made for winding up and terminating all mattes pending under the Acts for the relief of insolvent debtors. For administration of insolvent estates of a deceased person by the Chancery Division, see Administration of Estates Act, 1925, s. 34 and 1st Sched. And under the (English) Law Reform (Married Women and Tortfeasors) Act, 1935, a woman may be made bankrupt, even though she is not carrying on a trade except in respect of any contracts entered into, or debt or obligation incurred before 2nd August, 1935, if she was not then carrying on 'a trade [s. 125 of the (English) Bankruptcy Act, 1914]. See BANKRUPT.