Meaning & Definition of word "Insolvency"
Insolvency
/ɪnˈsɒlvənsi/
noun:
- 1. The state of being unable to pay debts owed.
- Example: The company declared insolvency after failing to meet its financial obligations.
- 2. The financial condition of an individual or organization that cannot pay off its debts.
- Example: Many businesses face insolvency during economic downturns.
- 3. A legal process involving the redistribution of assets to repay creditors.
- Example: After declaring insolvency, the firm underwent a restructuring process to settle its debts.
- 4. The inability to satisfy the claims of creditors in full.
- Example: His insolvency became evident when multiple creditors began to pursue legal action.
Etymology
●From Latin 'insolventem', meaning 'not able to pay debts'
Common Phrases and Expressions
declaration of insolvency:
A formal statement confirming that an individual or business cannot pay its debts.
insolvency proceedings:
Legal processes related to managing and settling the debts of an insolvent entity.
insolvency practitioner:
A qualified professional who manages the affairs of insolvent individuals or businesses.
Related Words
bankruptcy:
A legal status of a person or entity that cannot repay the debts it owes.
liquidation:
The process of converting assets into cash to pay off debts.
creditor:
An entity that has a claim against another, often in the form of loans or payment due.
Slang Meanings of insolvency
Meaning: going bust
● Example Sentence: After several bad quarters, the startup is going bust.
Meaning: broke
● Example Sentence: He's so broke he can't even afford to pay his rent.