In order to properly appraise how financially healthy you are there must be brutal honesty in your assessment. To do otherwise will only blind you to the stark reality of possible insolvency.
Solvent – a person is solvent, if any only if, that person is able to pay all the person’s debts, as and when they become due and payable.
Insolvent – a person who is not solvent, is insolvent.
These definitions may be found in the Bankruptcy Act 1966 at Sections 5AA(2) and (3).
The state of continuing insolvency will ultimately lead to:
- Arrears of payments;
- Demands;
- Collection activity;
- Repossessions;
- Legal actions; and possibly
- Bankruptcy.
You need to take a serious look at your financial position if you have reason to believe that you are or may become insolvent in the near future.
You must act quickly to resolve the cause or causes, as often there is more than just one issue to address.
Debt Management Advice
5/01/10