What Does Being Insolvent Actually Mean?
A person is believed to be insolvent when he or she has ceased to pay his debts in the normal course of business. The person is unable to pay the debts, and they fall due. The word insolvent means not solvent, unable to satisfy the discharge liabilities of the creditors. These liabilities are not satisfied either because of the inability to pay the debts as they mature or due to exceeded limit than the assets. The synonyms of an insolvent person are penniless, destitute, impoverished and bankrupt. The business insolvency can be categorised as cash flow insolvency and the balance sheet insolvency. The cash flow insolvency refers to the inability to pay the discharges. The balance sheet insolvency rules out the last resort. It refers to having the negative assets. It means that either you do not have any assets, or your liabilities exceed the asset limit. They are not sufficient to pay off the due debts. There are many factors that may contribute to insolvency. This is the problem that i
