Finesentence mobile logo
Sign in Login / Register

Insolvency: meaning, definitions and examples

💸
Add to dictionary

insolvency

 

[ɪnˈsɒlv(ə)nsi ]

Definitions

Context #1 | Noun

financial

The state of being insolvent; inability to pay one's debts.

Synonyms

bankruptcy, debt, penniless.

Which Synonym Should You Choose?

arrow down
Word Description / Examples
insolvency

This term is used in a legal and financial context to describe a situation where a person or business cannot pay their debts when they are due.

  • The company filed for insolvency after failing to meet its financial obligations.
  • Insolvency can lead to bankruptcy if no solution is found.
bankruptcy

This term is used in legal settings to describe the formal process when a person or organization is declared unable to pay their outstanding debts. It often involves legal proceedings.

  • After months of struggling, the store declared bankruptcy and shut its doors.
  • Following their bankruptcy, they had to sell their assets to repay creditors.
debt

This word is used generally to describe the state of owing money or obligations to another party. It can refer to both individuals and organizations.

  • Many students graduate with a significant amount of debt from student loans.
  • Having too much debt can severely impact your credit score.
penniless

This term is used to describe a person who has no money. It is often used in an informal context and can carry a negative connotation.

  • After losing his job, he found himself penniless and in need of assistance.
  • The once wealthy businessman became penniless due to poor investments.

Examples of usage

  • The company declared insolvency after failing to meet its financial obligations.
  • Personal insolvency can have serious consequences for individuals and families.
Context #2 | Noun

legal

The condition of being unable to meet one's financial obligations as they come due.

Synonyms

bankruptcy, indebtedness.

Which Synonym Should You Choose?

arrow down
Word Description / Examples
insolvency

Used when a person or company is unable to pay their debts on time, but it doesn't necessarily mean they've officially declared bankruptcy.

  • The company's insolvency was evident from its inability to meet payroll
  • The legislation focuses on how to handle insolvency situations effectively
bankruptcy

Refers to a legal process where individuals or companies officially declare their inability to pay off their debts, often involving court proceedings.

  • He filed for bankruptcy after accumulating enormous debts
  • The company declared bankruptcy to reorganize its finances under the court's supervision
indebtedness

Describes the general state of owing money, without implying immediate financial distress or legal proceedings.

  • His indebtedness grew due to multiple loans and credit card bills
  • The government's indebtedness to foreign nations has reached alarming levels

Examples of usage

  • The court declared the insolvency of the debtor due to unpaid debts.

Interesting Facts

Etymology

  • The word has roots in the Latin word 'solvere', which means 'to loosen' or 'to pay'.
  • The prefix 'in-' suggests negation, indicating 'not solvent' or lacking the ability to pay.

Legal Context

  • Insolvency can lead to legal proceedings such as bankruptcy, where a court decides how debts will be managed.
  • Different countries have varying laws regarding insolvency and bankruptcy, influencing how debts are handled.

Economic Impact

  • When companies face insolvency, it can result in significant job losses and affect local economies.
  • Financial institutions often monitor the solvency of businesses to prevent larger economic issues.

Psychological Effects

  • Facing insolvency can cause high levels of stress and anxiety for individuals and business owners.
  • Emotional distress from financial issues may impact personal relationships and mental health.

In Popular Culture

  • In literature, characters facing insolvency often portray themes of struggle, resilience, and redemption.
  • Films and shows may depict insolvency as a dramatic turning point, emphasizing the emotional turmoil involved.

Translations

Translations of the word "insolvency" in other languages:

🇵🇹 insolvência

🇮🇳 दिवालियापन

🇩🇪 Insolvenz

🇮🇩 kebangkrutan

🇺🇦 неплатоспроможність

🇵🇱 niewypłacalność

🇯🇵 破産

🇫🇷 insolvabilité

🇪🇸 insolvencia

🇹🇷 iflas

🇰🇷 파산

🇸🇦 إعسار

🇨🇿 insolvence

🇸🇰 insolventnosť

🇨🇳 破产

🇸🇮 neplačilna sposobnost

🇮🇸 þrot

🇰🇿 тӛлем қабілетсіздігі

🇬🇪 გადახდისუუნარობა

🇦🇿 ödəmə qabiliyyətsizliyi

🇲🇽 insolvencia

Word Frequency Rank

Ranked #11,610, this word falls into high-advanced vocabulary. It appears less frequently but is valuable for expressing precise meanings in specific contexts.