(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 Hawaii Revised Statutes 651C-2

  • Asset: means property of a debtor but does not include:

    (1) Property to the extent that it is encumbered by a valid lien;

    (2) Property to the extent that it is generally exempt under nonbankruptcy law; or

    (3) An interest in property held in tenancy by the entireties to the extent that it is not subject to process by a creditor holding a claim against only one tenant. See Hawaii Revised Statutes 651C-1

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Debtor: means a person against whom a creditor has a claim. See Hawaii Revised Statutes 651C-1
  • 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: means anything that may be the subject of ownership. See Hawaii Revised Statutes 651C-1
  • Transfer: means 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 a payment of money, a release, a lease, and the creation of a lien or encumbrance. See Hawaii Revised Statutes 651C-1
(b) A debtor who is generally not paying his or her 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.

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