Person or firm whose liabilities exceed the value of owned assets. It is commonly illegal for the directors of an insolvent firm to continue to trade after becoming aware of their insolvent position. If despite their knowledge of the firm's insolvent position they do not refrain from receiving goods on credit, they may be charged with fraudulent misrepresentation of facts and may become personally liable for the firm's debts. If a seller discovers the insolvent status of a buyer after making a sale, the seller can reclaim the goods within a certain period.

Use insolvent in a sentence

  • If you get in to much debt you may be living in a state of insolvent and bankruptcy may be your only option out.

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  • If you find yourself running at an insolvent level then it will be time that some important financial decisions must be made.

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  • Stephen couldn't believe the company was insolvent and wondered how a huge firm like Mcclintock-Gunderson-Paltz could lose billions of dollars in a relatively short period of time.

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