First let me define insolvency

Based on sec. 4 of the R.A 10142 Financial Rehab. An

INSOLVENCY MEANS THAT IF A PERSON HAS A LOAN AND THE PERSON CANNOT PAY IN ITS DUE DATE
OR DEADLINE OF HIS/HER PAYMENT IS CONSIDERED AS AN INSOLVENT PERSON.

OR IF THE PERSON HAS A LIABILITY MORE THAN HIS/HER ASSET.

FOR EXAMPLE:

LETS LIQUIDATE THE ASSET OF PERSON A

PERSON A HAS A CASH WORTH 20,OOO PESOS….

WITH THE TOTAL OF 570,000 PESOS

WHILE HIS LIABILITIES ARE:

PERSON A HAS A LOAN IN BANK WORTH 500,000 BECAUSE OF HIS GAMBLING

AND A CREDIT CARD LOAN WORTH 200,000

WITH THE TOTAL OF 700K

PERSON A CONSIDERED AS INSOLVENT PERSON BECAUSE AS YOU CAN SEE HIS LIABILITIES ARE GREATER
THAN IN HIS ASESTS SO THE REMAINING BALANCE OF HIS LIABILITIES, PERSON A CANNOT PAY IT
BECAUSE OF THE INSUFFICIENCY OF HIS ASSETS.

THANK YOU FOR YOUR LISTENING, WE HOPE THAT YOU GAIN MORE KNOWLEDGE ABOUT INSOLVENCY