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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