Have you ever wondered what the difference is between the above terms? I got asked this today by a curious delegate. (Curious as in inquisitive. I don't mean to imply the delegate is strange. Very sensible chap.)
Think of financial collapse in three stages:
1. Being unable to pay your debts as they fall due. You are now in a state of insolvency.
2. Being officially declared insolvent by the court, resulting in all assets being given over to a trustee, and you being relieved from all debts. You are now in a state of bankruptcy.
3. Having your assets sold and turned into ready cash, which is distributed to your creditors, with the balance coming to you, the owner, if you are lucky. You have now been liquidated.
I hope this helps, Michael.
