Insolvency

This describes a person, business or incorporation that, while not bankrupt, cannot meet certain stan­dards of financial viability. An insolvent person is one who cannot pay his or her debts as they are due, has stopped paying his or her debts, or one whose assets could not cover his or her debts. Insolvency is a financial condition in which a taxpayer's total liabilities (debts owed) exceed the total fair market value of all his or her assets (cash and other property). A person is insolvent to the extent his or her liabilities exceed his or her assets.

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