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Featured Word A1

insolvency (noun)

Insolvency is the state of being unable to pay your debts when they are due. It often happens when a person or business has more liabilities than assets.

💬 Example

"The small family business had to close down due to insolvency."

💡 Memory Tip

Imagine a king who is supposed to pay his knights (solve their problems), but he has no money ('in-' means not). He is '...

🏛️ Origin

🔗 Synonyms
bankruptcy liquidation financial failure ruin indebtedness
⚠️ Common Mistakes

Confusing insolvency with bankruptcy. → Insolvency is the state of being unable to pay debts; bankruptcy is the legal process that often follows.

Using 'insolvent' for any company that is losing money. → 'Insolvent' means unable to pay debts when due, not just unprofitable.

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