Deliberate Insolvency

Deliberate insolvency occurs when individuals or businesses intentionally create a financial situation where they cannot pay their debts. This may involve hiding assets or overstating liabilities to avoid obligations or to benefit from bankruptcy laws. Unlike genuine insolvency, which arises from unforeseen circumstances, deliberate insolvency is a calculated tactic to escape financial responsibility. It can lead to legal consequences, including criminal charges. Authorities typically scrutinize financial behaviors to distinguish between honest financial difficulties and fraudulent actions aimed at evading debt repayment.