Recognizing the Concept of Insolvency and Poverty and its Influence on Law Interpretation1

The institutions of insolvency and poverty have been investigated in Imamiayh jurisprudence and other Islamic sects. In the legal literature of Iran there were three institutions of insolvency, poverty and bankruptcy before 1934. The law-maker has also mentioned these three institutions in Iran’s Civil Code. After the dissolution of insolvency institution in 1934 and the sameness of this concept (insolvency) to poverty, this question was raised that how we should interpret insolvency institution in the present civil code? The signif- icance of the issue is that in many legal articles the law-maker refers to the title of insolvency and the judicial procedure faces with problems in its interpretation, namely with respect to the article 380 of civil code, and consequently, the issue of insolvency option regarding this problem is evident. The objective of this paper is to present a correct interpretation of these legal codes based on legal and jurisprudential sources, although legal doctrine has adopted two general approaches including replacing insolvency with poverty and replacing bankruptcy with poverty in interpreting this legal institution after its dissolution from legal literature. The authors have concluded that the correct approach is interpreting legal articles with respect to jurisprudential principles. Therefore, revisiting the concept of insolvency and poverty is intended so that the main question of the study is responded.