passivo is the section of a company financial statements where debts are recorded. Being in a "stato passivo" means the debt exceeds the income and the statements show an overall negative balance. The company/individual is then said to be "insolvent".

Dictionary.com Unabridged (v 1.1) - Cite This Source
in·sol·vent /ɪnˈsɒlvənt/ Pronunciation Key - Show Spelled Pronunciation[in-sol-vuhnt] Pronunciation Key - Show IPA Pronunciation
–adjective 1. not solvent; unable to satisfy creditors or discharge liabilities, either because liabilities exceed assets or because of inability to pay debts as they mature.
2. pertaining to bankrupt persons or bankruptcy.
–noun 3. a person who is insolvent.


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[Origin: 1585–95; in-3 + solvent]


—Synonyms 1. penniless, destitute, impoverished, bankrupt.

When a company or an individual files a plea to go bankrupt, the Corut will look at all the financial records.
A meeting of creditors is then held. The creditors give the judge the amounts that the company owes them. If the judge feels that the amount of debt (liabilities) is not enough for the company to justify the bankruptcy, he/she will rule against the bankrupcy plea and force the company (or individual) to repay the debts sometimes in full, other times partially.

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Note added at 16 hrs (2007-03-21 12:52:50 GMT)
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oops typo..the Court (not Corut.. silly me)will look at ..