insolvency

The insufficiency of the entire property and assets of an individual to pay his debts. 29 Am J Rev ed Insolv § 2. In a practical commercial sense, the inability of a person to pay his debts as they become due in the ordinary course of his business, such being the sense of the term as applied to traders and merchants, permitting a determination of insolvency, although the debts of the person actually may be paid at some future time on a settlement and winding up of his affairs (29 Am J Rev ed Insolv § 2) but apparently giving to a debtor the advantage of the use of his credit to raise money for the payment of his debts. United States v Anderson Co. (CA7 Ind) 119 F2d 343. By definition in the Bankruptcy Act, controlling for the purpose of determining the commission of an act of bankruptcy:-the status of a person whenever the aggregate of his property exclusive of any property which he may have conveyed, transferred, concealed, removed, or permitted to be concealed or removed, with intent to defraud, hinder, or delay his creditors, shall not at the fair valuation be sufficient in amount to pay his debts. Bankr Act § 1(19); 11 USC § 1(19); 9 Am J2d Bankr § 160. For the purpose of determining whether a transfer is fraudulent under the Bankruptcy Act:-the status of a person when the present fair salable value of his property is less than the amount required to pay his debts. Bankruptcy Act § 67 (d) (1) (d); 11 USC § 107 (d) (1) (d). (This definition is controlling as against the preceding definition, also from the Bankruptcy Act, inasmuch as Congress intended less stringent requirement in proof of insolvency in fraudulent transfer cases than in other phases of bankruptcy. Holohan v Lewis (DC Fla) 182 F Supp 473.) In reference to the qualification of a person to administer the estate of a decedent, not the mere not owning of property, but the owing of debts in excess of the value of property. 31 Am J2d Ex & Ad § 68. A debtor is "insolvent" within the meaning of a statute giving priority to debts due the United States from an insolvent debtor, if, not having sufficient property to pay all his debts, he either makes a voluntary assignment of his property for the benefit of his creditors or commits an act of bankruptcy. United States v Gotwals (CAI 0 Okla) 156 F2d 692, 169 ALR 619. No lien is created by the statute; the priority established can never attach while the debtor continues the owner and in the possession of the property, although he may be unable to pay all his debts; no evidence can be received of the insolvency of the debtor until he has been divested of his property in one of the modes stated in the statute. 29 Am J Rev ed Insolv § 68. See acts of insolvency; assignee in insolvency; hopelessly insolvent; open insolvency.