Insolvency is defined in both the Bankruptcy Act 1966 (Cwlth) (updated in 1992) and in the Corporations Act2001, Australia's national company law. Under both laws, a person is solvent only if they are able to pay all their debts when they become due (Corporations Act s. 95A; Bankruptcy Act s. 5). Both laws go on to state, perhaps unnecessarily, that a person who is not solvent is insolvent. This definition applies to both personal and company insolvency. It is an important definition as a number of legal consequences hinge on whether a person or a company is, or is not, solvent.