insolvent
in-SOL-vint
/ɪnˈsɒlvənt/
Unable to pay debts owed.
Describes the financial state of an individual or organization whose liabilities exceed their assets, making them unable to meet their financial obligations. It's the condition that often precedes bankruptcy.
The story behind the word. The word 'insolvent' comes from the Latin prefix 'in-' meaning 'not,' combined with 'solvere,' meaning 'to loosen, to untie, to pay.' So, 'insolvent' literally means 'not able to pay' or 'not able to loosen/untie' one's financial obligations. This root also gives us words like 'solution' and 'dissolve.'
Word relationships
- bankrupt: Adjective form of 'bankruptcy,' meaning legally declared unable to pay debts; 'insolvent' is the financial state, 'bankrupt' is the legal status.
- indebted: Simply means owing money; 'insolvent' means unable to pay what is owed.
- destitute: Lacking basic necessities; 'insolvent' is specifically about debts.
- solvent: Able to pay one's debts.
- prosperous: Successful and wealthy.
Commonly confused with
- bankrupt: 'Insolvent' is the state of being unable to pay debts; 'bankrupt' is the legal status declared by a court.
Word family
- insolvency (noun): The state of being insolvent.
- solvent (adjective): Able to pay one's debts.
Collocations
- financially insolvent
- declared insolvent
- become insolvent
- insolvent company
Example sentences
- "After several quarters of losses, the company was declared insolvent and forced to cease operations." A company's financial status.
- "The government had to bail out the bank to prevent it from becoming insolvent and triggering a wider financial crisis." Government intervention.
- "The court determined that the individual was truly insolvent, with no reasonable prospect of repaying their creditors." From a legal report.
Memory hook
If you are 'insolvent,' you 'can't solve' your money problems. Can't solve
When not to use
Do not use 'insolvent' to mean simply 'broke' or 'lacking money for a purchase'; it refers to a systemic inability to pay all debts.
Fun facts
- The concept of 'solvency' is crucial for banks and financial institutions, as their failure can have ripple effects throughout the economy.
Related words
Explore more words
insolvency, solvency, liability, deficit, impecunious, defunct
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