Doctrines of Insolvency Law

Insolvency law doctrines govern how financially distressed individuals or companies handle situations where they cannot pay their debts. Key doctrines include the "priority of claims," which determines the order in which creditors are paid; "pari passu," meaning equal treatment for creditors of the same class; and "confirmation," where a debt restructuring plan is approved if it’s fair and feasible. These doctrines aim to fairly distribute limited assets, facilitate the resolution of insolvency efficiently, and provide mechanisms for reorganization or discharge of debts, giving debtors a chance to recover while protecting creditors’ rights.