Insolvabilité

Insolvabilité refers to a state where an individual or entity is unable to meet their financial obligations as they become due. This means that their debts outweigh their assets or their cash flow is insufficient to pay creditors. Insolvency can be a temporary condition or a more permanent one, depending on the circumstances and the measures taken to address it.

There are generally two main types of insolvency: cash-flow insolvency and balance-sheet insolvency. Cash-flow insolvency occurs when an entity has assets but lacks the immediate liquidity to pay its debts. Balance-sheet insolvency, on the other hand, arises when an entity's liabilities exceed its assets, meaning it owes more than it owns.

When an individual or company becomes insolvent, various legal and practical consequences can follow. These may include creditors taking legal action to recover their debts, the potential for bankruptcy proceedings, or the restructuring of debts. The specific outcomes depend on the jurisdiction, the nature of the debts, and the actions taken by the insolvent party and their creditors. Managing insolvency often involves seeking professional advice from financial advisors or legal experts to navigate the complexities of debt resolution and potential legal frameworks.