What does insolvency mean?
Insolvency means inability to pay. It means that your debt burden is so large that you are unable to settle your debts even by repaying them in instalments. Having too many debts does not automatically make you insolvent. The insolvency procedure must be officially filed. Filing for insolvency is one way to get out of debt for a long term.
Ask a debt counselling service for advice. Try to find a good solution with the person you owe money to with the help of a debt counsellor. This is also known as “debt settlement proceedings.”
If the debt settlement proceedings don’t work, you can file for insolvency.
An insolvency procedure costs energy and you must not make new debts during this time. But once you get through the insolvency procedure, you will be debt free, usually after 6 years.