insolvency

noun
in·​sol·​ven·​cy | \ (ˌ)in-ˈsäl-vən(t)-sē How to pronounce insolvency (audio) , -ˈsȯl-\

Definition of insolvency

: the fact or state of being insolvent : inability to pay debts

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Synonyms & Antonyms for insolvency

Synonyms

bankruptcy, failure, ruin

Antonyms

solvency

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Examples of insolvency in a Sentence

unless the economy improves, many resorts in the area face insolvency

Recent Examples on the Web

Corporate insolvency firm David Rubin & Partners has been appointed as Blippar’s administrators and will now attempt to sell the company, either in parts or as a complete entity. James Vincent, The Verge, "Hyped AR startup Blippar crashes into financial reality," 18 Dec. 2018 Set the premiums too low, and the program faces insolvency or repeated raids on the federal budget, which has been the case since 2005 -- and especially since the phenomenal 2017 hurricane season. Drew Broach, NOLA.com, "On flood insurance, here's why John Kennedy thinks reform is languishing," 31 May 2018 The 400,000-member Teamsters Central States fund, with 48,000 Ohio members, narrowly avoided pension cuts of up to 50 percent or more but still faces eventual insolvency if a solution isn't found. Stephen Koff, cleveland.com, "Sen. Sherrod Brown co-chairs committee to fix union pensions, but solution won't be easy," 28 Feb. 2018 Because previous investments in the land ended up in bankruptcy, the site is under management of Berlin’s insolvency administrator, which gave Trockland the rights to the land with a deadline of January 2019 to exercise them, Mr. Nathaniel said. Sara Germano, WSJ, "Berlin Is Again Divided, and Wonders If David Hasselhoff Will Pick Sides," 9 Nov. 2018 The insolvency date for Medicare’s giant inpatient trust fund moved three years closer, to 2026. Ricardo Alonso-zaldivar, The Seattle Times, "Help Wanted: Overseers for Social Security and Medicare," 1 Oct. 2018 Since the introduction of the bankruptcy code, hundreds of companies have entered insolvency proceedings and their owners are losing control, which was unimaginable just two years ago. Corinne Abrams, WSJ, "India Overtakes China as Favored Target for Corporate Deals," 25 Dec. 2018 During that time their ability to lend fell as the threat of insolvency rose. Thomas M. Hoenig And, WSJ, "Relaxing Bank Capital Requirements Would Risk Another Crisis," 26 Apr. 2018 For Social Security, insolvency remained unchanged for 2034. Ricardo Alonso-zaldivar, The Seattle Times, "Help Wanted: Overseers for Social Security and Medicare," 1 Oct. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'insolvency.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of insolvency

1660, in the meaning defined above

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Statistics for insolvency

Last Updated

28 Apr 2019

Look-up Popularity

Time Traveler for insolvency

The first known use of insolvency was in 1660

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More Definitions for insolvency

insolvency

noun

Financial Definition of insolvency

What It Is

In most usages, insolvency is the inability of a company or individual to meet its financial obligations as they come due. In the legal sense of the word, an entity is considered insolvent if its total liabilities exceed its total assets.

How It Works

Entities most commonly become insolvent by taking on too much debt. For example, a company with a heavy debt load may find itself unable to cover its debt liabilities should its business slow.

In this case, the company must raise capital to pay its obligations via selling assets, borrowing, or somehow raising capital and/or reducing expenses.

If a company cannot meet its obligations, it may be forced to file for bankruptcy.

Why It Matters

Insolvency in public companies may continue to trade while restoring their financial health, but represent some of the riskiest investments on the market. Insolvency is a red flag for investors since it can lead to bankruptcy or the evation of assets in order to meet debt payments.

Source: Investing Answers

insolvency

noun
in·​sol·​ven·​cy | \ in-ˈsäl-vən-sē How to pronounce insolvency (audio) \
plural insolvencies

Legal Definition of insolvency

1 : the fact or state of being insolvent — compare bankruptcy
2 : insufficiency (as of an estate) to discharge all enforceable debts

Note: Insolvency matters are covered under the Bankruptcy Code.

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