Video: Insolvency

In this lesson, Nick Palazzolo, CPA, breaks down the concept of insolvency, an essential aspect for understanding bankruptcy and its various chapters. He makes sense of the criteria that determine whether an individual can be deemed insolvent, explaining how liabilities surpassing assets play into this evaluation. The discussion delves into the specifics of eligibility requirements for bankruptcy under chapters 7, 11, and 13, illuminating the differences between liquidation and reorganization proceedings. Nick uses relatable examples, such as the dilemma of wanting to retain a prized possession like a sports car amidst bankruptcy. The lesson not only clarifies the legal frameworks intended to prevent abuse of bankruptcy laws but also reassures that the system aims to maintain an individual's basic living necessities. Furthermore, Nick underscores the dynamic nature of bankruptcy codes and the importance of staying updated with the annual changes, a task made easier with the inclusion of current resources in the course material.