Insolvency

insolventcorporate insolvencyinsolvency lawbankruptcyinsolvenciesinsolvency proceedingstechnically insolventadministrationbankruptbusiness recovery
Insolvency is the state of being unable to pay the money owed, by a person or company, on time; those in a state of insolvency are said to be insolvent.wikipedia
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Bankruptcy

bankruptbankruptcy protectionbankruptcies
The person or company might enter bankruptcy, but not necessarily. In the case of Sole Trader Insolvency, the insolvency options include Individual Voluntary Arrangements and Bankruptcy. Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.
Bankruptcy is not the only legal status that an insolvent person may have, and the term bankruptcy is therefore not a synonym for insolvency.

Default (finance)

defaultdefaulteddefaults
If a government does not meet an obligation, it is in "default".

Liquidation

liquidatedvoluntary liquidationliquidate
The principal focus of modern insolvency legislation and business debt restructuring practices no longer rests on the liquidation and elimination of insolvent entities but on the remodeling of the financial and organizational structure of debtors experiencing financial distress so as to permit the rehabilitation and continuation of their business.
A creditors’ voluntary liquidation (CVL) is a process designed to allow an insolvent company to close voluntarily.

Companies' Creditors Arrangement Act

Companies' Creditors Arrangements ActCCAACompanies Creditors Arrangement Act
An alternative regime is available to larger companies (or affiliated groups) under the Companies' Creditors Arrangements Act, where total debts exceed $5 million.
The Companies' Creditors Arrangement Act ("CCAA") (Loi sur les arrangements avec les créanciers des compagnies) is a statute of the Parliament of Canada that allows insolvent corporations owing their creditors in excess of $5 million to restructure their business and financial affairs.

Crime

criminalcriminalscriminal offence
In some jurisdictions, it is an offence under the insolvency laws for a corporation to continue in business while insolvent.

Corporation

corporatecorporationsincorporated
In some jurisdictions, it is an offence under the insolvency laws for a corporation to continue in business while insolvent.
Insolvency may result in a form of corporate failure, when creditors force the liquidation and dissolution of the corporation under court order, but it most often results in a restructuring of corporate holdings.

Insolvency practitioner

insolvency practicepractitioner
The directors and shareholders can instigate the liquidation process without court involvement by a shareholder resolution and the appointment of a licensed Insolvency Practitioner as liquidator.
In the United Kingdom, only an authorised or licensed insolvency practitioner (usually abbreviated to IP) may be appointed in relation to formal insolvency procedures.

Administration (law)

administrationvoluntary administrationwent into administration
One particular type of Administration that is becoming more common is called pre pack administration (more information under administration (law)).
As a legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions, similar to bankruptcy in the United States.

Company voluntary arrangement

CVA
These are Administration and Company Voluntary Arrangement:
Under UK insolvency law an insolvent company can enter into a company voluntary arrangement (CVA).

Sole trader insolvency

business insolvencysole proprietorsunlimited personal liability
In the case of Sole Trader Insolvency, the insolvency options include Individual Voluntary Arrangements and Bankruptcy.
Sole trader insolvency occurs when the business cannot meet financial obligations.

Receivership

receiverreceiversadministrative receivership
The process, latterly known as administrative receivership or, in Scotland, receivership, has existed for many years and has often resulted in a successful rescue of a company's business via a sale, but not of the company itself.

Insolvency Act 1986

IA 1986company voluntary arrangementsInsolvency Act
Insolvency is defined both in terms of cash flow and in terms of balance sheet in the UK Insolvency Act 1986, Section 123, which reads in part:
The Insolvency Act 1986 essentially governs issues relating to personal bankruptcy and Individual Voluntary Arrangements and all administrative orders relating to company insolvency.

Chapter 11, Title 11, United States Code

Chapter 11Chapter 11 bankruptcyChapter 11 bankruptcy protection
In others (like the United States with its Chapter 11 provisions), the business may continue under a declared protective arrangement while alternative options to achieve recovery are worked out.
If the business is insolvent, its debts exceed its assets and the business is unable to pay debts as they come due,

Asset

assetstotal assetstangible asset
Cash-flow insolvency is when a person or company has enough assets to pay what is owed, but does not have the appropriate form of payment.

Synonym

synonymssyn.synonymous
It has been suggested that the speaker or writer should either say technical insolvency or actual insolvency in order to always be clear - where technical insolvency is a synonym for balance sheet insolvency, which means that its liabilities are greater than its assets, and actual insolvency is a synonym for the first definition of insolvency ("Insolvency is the inability of a debtor to pay their debt."). Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.

Accounting liquidity

liquidityIlliquidityliquid
Cash-flow insolvency involves a lack of liquidity to pay debts as they fall due.

Net worth

net assetsnet wealthnet
Balance sheet insolvency involves having negative net assets—where liabilities exceed assets.

Court

court of lawcourtscourts of law
Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.

Legislation

legislativelegislatelegislative act
The principal focus of modern insolvency legislation and business debt restructuring practices no longer rests on the liquidation and elimination of insolvent entities but on the remodeling of the financial and organizational structure of debtors experiencing financial distress so as to permit the rehabilitation and continuation of their business.

Debt restructuring

debt-to-equity swapdebt-for-equitydebt-for-equity swap
The principal focus of modern insolvency legislation and business debt restructuring practices no longer rests on the liquidation and elimination of insolvent entities but on the remodeling of the financial and organizational structure of debtors experiencing financial distress so as to permit the rehabilitation and continuation of their business.

Financial distress

financially distressedfinancial difficultiesfinancial struggles
The principal focus of modern insolvency legislation and business debt restructuring practices no longer rests on the liquidation and elimination of insolvent entities but on the remodeling of the financial and organizational structure of debtors experiencing financial distress so as to permit the rehabilitation and continuation of their business.

Creditor

creditorslenderlenders
It can be, in several jurisdictions, grounds for a civil action or even an offence, to continue to pay some creditors in preference to other creditors once a state of insolvency is reached.

Sovereignty

sovereignsovereign entitysovereign nation
As governments are sovereign entities, persons who hold debt of the government cannot seize the assets of the government to re-pay the debt.

Refinancing

refinancerefinancedre-finance
However, in most cases, debt in default is refinanced by further borrowing or monetized by issuing more currency (which typically results in inflation and may result in hyperinflation).