Financial Distress
/ˈfaɪnænʃəl dɪˈstrɛs/
Definitions
- (n.) A condition in which an individual or organization cannot meet or has difficulty meeting financial obligations.
The company filed for bankruptcy due to severe financial distress.
- (n.) A legal state prompting creditor actions such as restructuring or insolvency proceedings.
Financial distress often triggers negotiations between debtors and creditors.
Related terms
See also
Commentary
Often used in negotiations and legal filings to describe a state that precedes insolvency; important to distinguish from insolvency itself, which is a formal legal status.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.