insolvenserett

Insolvenserett, or insolvency law, is the body of law that governs situations where an individual or a legal entity is unable to pay their debts. It provides a legal framework for addressing financial distress and aims to balance the interests of the debtor and their creditors. The primary goals of insolvency law are to ensure fair distribution of the debtor's remaining assets among creditors, to allow an honest but unfortunate debtor to achieve a fresh financial start, and to maintain confidence in the economic system.

Insolvency proceedings can take various forms. For individuals, this might involve personal bankruptcy, where assets are liquidated to pay creditors, and the individual is discharged from most debts after a set period. For companies, insolvency can lead to liquidation, where the business ceases to operate, its assets are sold, and the proceeds distributed to creditors. Alternatively, a company might undergo restructuring or reorganization, often through administration or receivership, where a new plan is put in place to try and save the business and repay creditors over time.

Key principles in insolvency law include the concept of equal treatment of similarly situated creditors, the avoidance of preferential payments made shortly before insolvency, and the orderly realization and distribution of assets. The specific rules and procedures vary significantly between different jurisdictions, reflecting their unique legal traditions and economic priorities. Legal professionals specializing in insolvency law advise both debtors and creditors on their rights and obligations throughout the insolvency process.