Wash. Rev. Code » Title 19 · Chapter 19.40
Revised Code of Washington

Wash. Rev. Code § 19.40.021 (2026)

Insolvency

✓ current as of May 2026
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(1) A debtor is insolvent if, at a fair valuation, the sum of the debtor's debts is greater than the sum of the debtor's assets.
(2) A debtor that is generally not paying the debtor's debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.
(3) 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.
(4) 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.
[ 2017 c 57 s 2; 1987 c 444 s 2.]

Notes:

Effective date—1987 c 444: See note following RCW 19.40.011.
Notes of Decisions
Cited in 6 cases (3 in the last 5 years), 2011–2024 · leading case: Calvert v. Erdman (In re Nw. Territorial Mint, LLC), 591 B.R. 852 (Bankr. W.D. Wash. 2018).
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Calvert v. Erdman (In re Nw. Territorial Mint, LLC), 591 B.R. 852 (Bankr. W.D. Wash. 2018). · cites it 2× “RCW § 19.40.021. The Trustee attempted to show that since the beginning of 2012, the Mint was insolvent on a balance-sheet basis or, in the alternative, that the Mint was unable to pay its debts when they became due.”
Rigby v. Mastro (In re Mastro), 465 B.R. 576 (Bankr. W.D. Wash. 2011). · cites it 2× “Similarly, RCW 19.40.021 provides that, (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.”
United States v. Allahyari (W.D. Wash. 2022). · cites it 3× “When a debtor is presumed insolvent under RCW 19.40.021, the debtor has the burden of proving that the nonexistence of insolvency is more probable than its existence.”
Mitchell v. Kruckenberg (Bankr. D. Or. 2024). · cites it 2× “240 (1) (2019); Wash. Rev. Code § 19.40.051 (a) (2016); Wash.”
United States v. Weathers (W.D. Wash. 2021). · cites it 2× “RCW 19.40.021(2) provides that 6 [a] debtor that is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent.”
Maple Valley Park Place Llc v. Tax Resource Centers, Inc. (Wash. Ct. App. 2020). “(3) Subject to RCW 19.40.021(2), a creditor making a claim for relief under subsection (1) or (2) of this section has the burden of proving the elements of the claim for relief by a preponderance of the evidence.”
— Wash. Rev. Code § 19.40.021(2) — 3 cases
United States v. Weathers (W.D. Wash. 2021). “RCW 19.40.021(2) provides that 6 [a] debtor that is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent.”
Maple Valley Park Place Llc v. Tax Resource Centers, Inc. (Wash. Ct. App. 2020). “(3) Subject to RCW 19.40.021(2), a creditor making a claim for relief under subsection (1) or (2) of this section has the burden of proving the elements of the claim for relief by a preponderance of the evidence.”
United States v. Allahyari (W.D. Wash. 2022). “When a debtor is presumed insolvent under RCW 19.40.021, the debtor has the burden of proving that the nonexistence of insolvency is more probable than its existence.”
— Wash. Rev. Code § 19.40.021(a) — 1 case
Rigby v. Mastro (In re Mastro), 465 B.R. 576 (Bankr. W.D. Wash. 2011). “Similarly, RCW 19.40.021 provides that, (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.”
— Wash. Rev. Code § 19.40.021(b) — 1 case
United States v. Allahyari (W.D. Wash. 2022). “When a debtor is presumed insolvent under RCW 19.40.021, the debtor has the burden of proving that the nonexistence of insolvency is more probable than its existence.”
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