Insolvensrätten

Insolvensrätten, often translated as insolvency law, is the body of law that governs situations where an individual or a business is unable to pay their debts. It provides a framework for dealing with financial distress, aiming to achieve a fair distribution of the debtor's assets among creditors or to facilitate a restructuring and rehabilitation of the debtor. The core principle is to ensure an orderly process and prevent a chaotic scramble for the debtor's limited resources.

Key concepts within insolvency law include bankruptcy, liquidation, and reorganization. Bankruptcy typically refers to the situation where a debtor's assets are sold to pay off creditors, and the debtor is then discharged from their remaining debts. Liquidation, often used for companies, involves the winding up of the business and the distribution of its assets. Reorganization, sometimes called administration or receivership, focuses on restructuring the debtor's finances to allow them to continue operating, often through a plan that restructures debt and operations.

Insolvency proceedings are usually initiated by either the debtor themselves (voluntary insolvency) or by their creditors (involuntary insolvency). The process is overseen by a court or a designated insolvency practitioner, such as a trustee or administrator, who is responsible for managing the debtor's affairs, assessing claims, and distributing assets according to legal priorities. Different jurisdictions have specific laws and procedures governing insolvency, reflecting varying legal traditions and economic priorities.