What is insolvency?
Insolvency refers to a financial state where an individual or entity is unable to meet their financial obligations and repay their debts when they fall due.
This could be due to cash flow issues
When there’s a lack of readily available funds to meet immediate financial obligations
Or could be a balance sheet issue
When total liabilities exceed total assets
These issues can arise due to various reasons such as poor financial management, declining revenues, excessive borrowing, or unexpected financial setbacks.
