What is 'Insolvency'?
Friday, February 23, 2018, 12:54 PM
Insolvency is when an organization, or individual, can no longer meet its financial obligations with its lender as debts become due. Before an insolvent company, or person, gets involved in insolvency-proceedings, it will likely be involved in informal arrangements with creditors, such as making alternative payment-arrangements. Insolvency can arise from poor cash-management, a reduction in cash inflow forecasts or from an increase in expenses.