What exactly is the distinction between bankruptcy and insolvency?

 

What exactly is the distinction between bankruptcy and insolvency?

Looking at these cases, the fundamental distinctions between bankruptcy and insolvency are as follows:

• Insolvency is a condition of financial trouble, whereas bankruptcy is a legal procedure or court order.
• There are several types of insolvency, including bankruptcy.
• Bankruptcy is not the only path out of debt.
• Individuals and single proprietors with unlimited liability are exempt from bankruptcy. Insolvency also affects companies.