Insolvency
/ɪnˈsɒlvənsi/
Definitions
- (n.) The state of being unable to pay debts owed.
The company declared insolvency after failing to meet its financial obligations.
- (n.) A legal condition wherein a debtor's liabilities exceed their assets, triggering formal debt relief procedures.
The court appointed a trustee to manage the debtor's estate following insolvency.
Related terms
See also
Commentary
Insolvency often precedes bankruptcy but is distinct; insolvency refers to financial status, while bankruptcy is a legal process.
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.