Insolvency

"Insolvency" is a financial state in which an individual or entity is unable to meet its financial obligations as they come due. This condition arises when one's liabilities or debts exceed the value of their assets.

Insolvency can affect both individuals and businesses and can be a precursor to legal bankruptcy proceedings, though being insolvent doesn't necessarily mean that bankruptcy is inevitable or immediate.

Insolvency can hinder operations, disrupt relationships with creditors and suppliers, and potentially lead to layoffs or business closure. When a company is insolvent, it may seek various remedies, such as restructuring its debts, negotiating with creditors, or selling off assets to improve liquidity.