Insolvency Test
Before any filing, know which insolvency you meet. Enter assets, liabilities, and monthly cash-flow gap to see balance-sheet and cash-flow status — the line that separates an orderly close from bankruptcy.
This calculator provides estimates for educational use only. It is not tax, legal, or financial advice. Figures are based on current IRS rules — verify against IRS.gov or consult a licensed professional. See our full disclaimer.
Your Insolvency Position
Insolvency Read
* Educational screening only. Does not determine bankruptcy eligibility. A personal guarantee is your own obligation — entity bankruptcy does not discharge it. Consult a bankruptcy attorney.
What This Test Shows
Balance-Sheet Test
Liabilities vs fair asset value — the Chapter 7 liquidation trigger.
Cash-Flow Test
Can you pay debts as they come due? The practical close trigger.
Contingent Liabilities
Adds personal guarantees so the picture includes what you personally owe.
Next-Step Pointer
Flags whether the numbers point to Ch 7, Ch 11 / Sub V, or Ch 13 — then see an attorney.
Authoritative References
- U.S. Courts — Bankruptcy Basics — Chapter 7 / 11 / 13 eligibility and the insolvency concepts.
- Bankruptcy-treatment-of-personal-guarantees summaries (retrieved 2026-08-13).
Educational screening only. This is not legal advice and does not determine your bankruptcy eligibility. Consult a licensed bankruptcy attorney.
Insolvency FAQs
Balance-sheet insolvency: liabilities exceed the fair value of assets (the Chapter 7 liquidation test). Cash-flow (equitable) insolvency: you cannot pay debts as they come due — the practical "can’t continue" trigger.
Both inform the path. A balance-sheet deficit points to Chapter 7 liquidation; being unable to pay as due while wanting to continue points to Chapter 11 / Subchapter V (or Chapter 13 for a sole prop).
The entity’s insolvency does not. A personal guarantee is your own obligation; only a personal bankruptcy addresses it, with its own tests. Size the guarantee separately with our PG tool.