Insolvency

Dictionary Says

Definition of 'Insolvency'

When an individual or organization can no longer meet its financial obligations with its lender or lenders as debts become due. Insolvency can lead to insolvency proceedings, in which legal action will be taken against the insolvent entity, and assets may be liquidated to pay off outstanding debts.
Investopedia Says

Investopedia explains 'Insolvency'

Before an insolvent company or person gets involved in insolvency proceedings, it will likely be involved in more informal arrangements with creditors, such as making alternative payment arrangements. Insolvency can arise from poor cash management, a reduction in the forecasted cash inflow or from an increase in cash expenses.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Bankruptcy

    A legal ...
  2. Liquidation

    1. When a ...
  3. Debt Relief

    The ...
  4. Tombstone

    A written ...
  5. Accounting Insolvency

    A situation ...
  6. Bankruptcy Risk

    The possibility ...
  7. Risk-Based Capital Requirement

    A rule that ...
  8. Death Knell Stocks

    The shares of a ...
  9. Debt Fatigue

    When a debtor ...
  10. Gross Negative Fair Value - GNFV

    An assessment of ...

Articles Of Interest

  1. Haunting Wall Street: The Halloween Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  2. What You Need To Know About Bankruptcy

    Don't choose this last-resort option until you learn how it will affect your future.
  3. What happens to the stock of a public company that goes bankrupt?

  4. What burst the Mississippi bubble?

  5. A History Of Wall Street Profitability

    Learn about the performance of the Dow Jones Industrial Averages (DJIA) through the decades.
  6. An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  7. 5 Things You Shouldn't Do During A Recession

    These tips can help you avoid financial risk, and are especially important during an economic slowdown.
  8. The Baltic Dry Index: Evaluating An Economic Recovery

    This index can provide insight into economic growth and production, but it has its critics.
  9. 4 ETF Strategies For A Down Market

    If the market's got you feeling low, these investments could pick you up.
  10. Disclaiming Inherited Plan Assets

    There are some good reasons for choosing not to accept the funds, but be sure you follow the proper process.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center