§ 31042 Insolvency Definition Criteria

• •If someone can't pay their bills when they're due, they're called 'insolvent'.
• •If someone owes more money than they have, they're also 'insolvent'.
• •It's like when you can't pay back your friend the $10 you borrowed because you don't have any money left.

You have $50 in your pocket, but you owe $100 to your friends and stores.

Since you owe more money than you have, you're insolvent. This means you can't pay everyone back right now.