Insolvent

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INSOLVENT. This word has several meanings. It signifies a person whose estate is not sufficient to pay his debts. Civ. Code of Louisiana, art. 1980.. A person is also said to be insolvent, who is under a present inability to answer, in the ordinary course of business, the responsibility which his creditors may enforce, by recourse to legal measures, without reference to his estate proving sufficient to pay all his debts, when ultimately wound up. 3 Dowl. & Ryl. Rep. 218; 1 Maule & Selw. 338; 1 Campb. it. 492, n.; Sugd. Vend. 487, 488. It signifies the situation of a person who has done some notorious act to divest himself of all his property, as a general assignment, or an application for relief, under bankrupt or insolvent laws. 1 Peters' R. 195; 2 Wheat. R. 396; 7 Toull. n. 45; Domat, liv. 4, t. 5, n. 1 et 2; 2 Bell's Com. 162, 5th ed.
     2. When an insolvent delivers or offers to deliver up all his property for the benefit of his creditors, he is entitled to be discharged under the laws of the, several states from all liability to be arrested. Vide 2 Kent, Com. 321 Ingrah. on Insolv. 9; 9 Mass. R. 431; 16 Mass. R. 53.
     3. The reader will find the provisions made by the national legislature on this subject, by a reference to the following acts of congress, namely: Act of March 3, 1797, 1 Story, L. U. S. 465; Act of March 2, 1799; 1 Story, L. S. 630; Act of March 2, 1831, 4 Sharsw. Cont. of Story, L. U. S. 2236; Act of June 7, 1834, 4 Sharsw. Cont. of Story, L. U. S. 2358; Act of March 2, 1837, 4 Sharsw. Cont. of Story, L. U. S. 2536. See Bankrupt.

References in periodicals archive ?
[F]or purposes of this section [Code [section] 108], the term "insolvent" means the excess of liabilities over the fair market value of assets.
The Internal Revenue Code's definition of "insolvent" hinges in large part on the fair market value of "assets." The term "assets," as used in IRC [section] 108(d)(3), is not defined elsewhere in the Internal Revenue Code.
Exclusion of the insurance made Cole insolvent. By being insolvent, Cole avoided tax recognition for the forgiven debt.
* Bankruptcy Court Interpretation of "Insolvent" May Assist Bankruptcy law also defines the term "insolvent." The Bankruptcy Code defines "insolvent" as
In the context of bankruptcy, increased potential for a debtor to be insolvent allows more successful litigation for the bankruptcy trustees.
But, the court noted that Congress did not adopt the Bankruptcy Code's definition of "insolvent." The Carlson court concluded that Congress, which clearly is capable of enacting legislation which unambiguously excludes exempt assets when determining solvency, (43) must have elected not to include such language in the Internal Revenue Code.