Insolvency law

Insolvency law is like a set of rules to help people and businesses who can't pay their debts. It's like asking your mom or dad for help when you run out of money to buy your favorite toys.

In insolvency law, there are two types of people: debtors and creditors. A debtor is someone who owes money, while a creditor is someone who is owed money.

If a person or company can't pay their debts, they can ask the court for help. The court can then appoint someone to manage their affairs and help them pay their debts. This person is called a trustee or a liquidator.

The trustee or liquidator will look at all the money that the debtor has and see how much they can give to their creditors. They will also try to sell any assets that the debtor has, like a house or car, to pay off the debts.

The insolvency law also helps protect the debtor and their assets from being taken away by the creditors. The debtor can keep some of their assets like their home, basic furniture, and personal belongings.

Overall, insolvency law is like a safety net for people who are going through a tough financial time. It helps them get back on their feet and pay their debts while protecting their rights and assets.