Community Stock Questions

A person or company that is insolvent has more liabilities than assets. He is unable to fulfill his obligations, such as paying debts on time (before maturity). An insolvent person or business entity cannot pay off its debts to all creditors.

Insolvency is a legally declared inability to repay debts. Generally, the only way to achieve insolvency is through bankruptcy. For an individual or business to be considered permanently insolvent, their liabilities will exceed their assets in worth. The legal process for declaring an individual or company insolvent can take years and is often very complicated depending on the type of financial situation the person or company finds themselves in.

Insolvency is a state where one is unable to repay what he owes. Thus one files for bankruptcy.