Insolvency in the legal and economic context

Abstract

Subject. This article analyzes the law enforcement and economic practices of the use of the terms Solvency and Insolvency, assesses their identity and belonging to Law or Economics. Objectives. The article aims to justify the need for a clearer application of the term Insolvency for economic relations, legal relations, and relations arising on the interfaces between Law and Economics within the framework of economic expertise. Methods. For the study, we used general scientific cognition methods, systems approach, logical generalization, and abstraction. Results. The article says that while the economic essence of the categories of Solvency and Insolvency seems to be different in the opposite sign only, at first glance, in the economic and legal field, they have different meanings. This cannot be ignored in scientific and practical activities in related areas of Law and Economics interaction, such as the application of bankruptcy law and expertise, for example. Conclusions and Relevance. The terms Solvency and Insolvency should be distinguished. While the meanings are opposite apparently, there are differences in the term interpretation for the purposes of economic assessments of the financial standing and legal estimates of insolvency to establish bankruptcy. The results of the study are intended to develop theoretical views on economic categories of solvency and their status in legal relations. They can be used for scientific and practical activities related to economic expertise, solvency analysis, and for teaching legal disciplines on bankruptcy and expertise.