Legal Memorandum: Presumption of Insolvency in MN

Issue: How is the presumption of insolvency defined in Minnesota?

Area of Law: Bankruptcy & Creditors Rights
Keywords: Presumption of insolvency; Debtor; Bankruptcy
Jurisdiction: Minnesota
Cited Cases: None
Cited Statutes: Minn. Stat. § 513.42(b); UFTA § 2, Comment (2)
Date: 02/01/2013

The presumption of insolvency referenced in Minn. Stat. § 513.42(b) arises if the debtor was not paying her debts as they become due.  This presumption is a carryover from the bankruptcy context: 

The presumption is established in recognition of the difficulties typically imposed on a creditor in proving insolvency in the bankruptcy sense, as provided in subsection (a) [liabilities greater than assets].  Not only is the relevant information in the possession of a noncooperative debtor but the debtor’s records are more often than not incomplete and inaccurate.  As a practical matter, insolvency is most cogently evidenced by a general cessation of payment of debts, as has long been recognized by the laws of other countries and is now reflected in the Bankruptcy Code.

UFTA § 2, Comment (2) (citation omitted; emphasis added). 


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