Am I Insolvent? A Simple Test

What does insolvent mean?

You are insolvent when you cannot pay your debts as they fall due, or when your total debts are worth more than your total assets. In UK law these are known as:

• Cash-flow insolvency — you cannot keep up with repayments as they become due.
• Balance-sheet insolvency — your liabilities exceed your assets.

You do not need both. Either is enough.

A simple self-test

Run the Debtrupt surplus income calculator. If, after essential bills (rent, council tax, utilities, food), you have little or no surplus, you may be insolvent.

Add up everything you owe — credit cards, loans, arrears, council tax, utility — and compare it to what your assets would realistically fetch if sold. Include your car, savings and any equity in your home; exclude essential household goods and tools of trade.

What to do next

Being insolvent does not automatically mean bankruptcy. Speak to a free UK debt charity — StepChange, National Debtline or Citizens Advice — before committing to anything. They can help you weigh bankruptcy, a DRO, an IVA or a Debt Management Plan. You can also use Debtrupt's Options comparison to see a starting suggestion.