Insolvency is the inability to pay debts as they come due. Insolvency occurs whenever liabilities, or debts, exceed assets and cash flow and a person or business can no longer re-pay their lender or lenders.

Insolvency can lead to insolvency proceedings, this is when legal action is taken against the insolvent entity, and assets may be liquidated to pay off the outstanding debts.

Get more information on Insolvency in the Real Estate Forum.