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


bankruptcy, failure, ruin



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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

On June 10, two operational creditors, Shaman Wheels and Gaggar Enterprises, had approached the NCLT’s Mumbai bench with their own insolvency pleas to recover dues. Pramod Mathew, Quartz India, "India’s oldest private carrier is headed for the bankruptcy court as nobody wants to buy it," 18 June 2019 His oversight of the South Bay-area school district, which faces possible insolvency, had been under scrutiny on several fronts. Howard Blume,, "Ex-school district leader found dead two months after stepping down amid questions," 10 June 2019 China’s short-term lending market for banks and other financial institutions has for years operated under the assumption that Beijing wouldn’t allow big losses in the event of defaults or insolvencies. Nathaniel Taplin, WSJ, "Warning Lights Are Flashing In China’s Money Market," 18 June 2019 Mexico’s banking commission said most of the money was siphoned off to a pair of companies connected to Olvera, who shortly after the insolvency moved to the U.S. and fought criminal charges in Mexico. Jason Buch,, "Authorities arrest two Mexican businessmen with San Antonio ties," 8 June 2019 On Friday, the company is asking shareholders to approve a financial bailout plan likely needed to stave off insolvency. Adam Feuerstein, STAT, "SEC extends probe into Northwest Biotherapeutics as financial struggles mount," 23 Apr. 2018 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,, "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,, "Sen. Sherrod Brown co-chairs committee to fix union pensions, but solution won't be easy," 28 Feb. 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

7 Jul 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



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


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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Comments on insolvency

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