IANAL and all that but AFAIK, insolvent doesn't neccessarily have to lead to bancrupcy. As a rule of thumb, you have lost your chance to recover from insolvency when your debts exceeds the value of your assets. For as long as your assets are more worth than your debts, you are fully capable to recover by your own means and so you should, within a reasonable period of time of course. I believe this to be true also in the US.
The thing is, the contract mentions insolvency as well as bankruptcy.