(a) A debtor is insolvent if the sum of the debtor’s debts is greater than all of the debtor’s assets at a fair valuation.
Terms Used In Alabama Code 8-9A-2
- asset: Property of a debtor, but the term does not include:
a. See Alabama Code 37-2-134
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- debtor: A person who is liable on a claim. See Alabama Code 37-2-134
- lien: A charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common law lien, or a statutory lien. See Alabama Code 37-2-134
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- property: Both real and personal property, whether tangible or intangible, and any interest in property whether legal or equitable and includes anything that may be the subject of ownership. See Alabama Code 37-2-134
- transfer: Every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance. See Alabama Code 37-2-134
- VALID LIEN: A lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings. See Alabama Code 37-2-134
(b) A debtor who is generally not paying his debts as they become due is presumed to be insolvent.
(c) A partnership is insolvent under subsection (a) if the sum of the partnership’s debts is greater than the aggregate, at a fair valuation, of all of the partnership’s assets and the sum of the excess of the value of each general partner’s nonpartnership assets over the partner’s nonpartnership debts.
(d) Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.
(e) Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.