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Insolvency

UK //ɪnˈsɒl.vən.si//US //ɪnˈsɑːl.vən.si//

Definition

The state of being unable to pay debts when they are due.

In simple words: The state of being unable to pay debts.

Examples

  • The company declared insolvency after failing to meet its financial obligations.
  • Insolvency can lead to legal proceedings to recover debts.
  • Many businesses face insolvency during economic downturns.
  • When an individual faces insolvency, they may seek debt counseling.
  • The insolvency process is complex and requires expert legal advice.

Usage notes

Used mainly in legal and financial contexts. Avoid in casual conversations. 'Insolvency' often involves company or personal financial issues that require serious consideration.

Grammar pattern

standalone noun

Memory hint

Insolvency sounds like 'in-solved' - imagine someone who can't solve their money problems.

Collocations

  • file for insolvency
  • declare insolvency
  • face insolvency
  • insolvency proceedings
  • insolvency practitioner

Synonyms

  • bankruptcy
  • financial distress
  • failure
  • liquidation
  • insufficiency

Common mistakes

  • Confused with 'solvency' which means being able to pay debts.
  • Used incorrectly in informal contexts.
  • Mistakenly treated as a verb; it is a noun.