Insolvent Debtor

An insolvent debtor is an individual or business that cannot pay their debts when they are due. This means their liabilities (what they owe) exceed their assets (what they own). Insolvency indicates financial hardship, often leading to legal processes like bankruptcy or restructuring to manage and settle debts. It is a temporary or permanent state where fulfilling payment obligations becomes impossible, prompting creditors and the debtor to seek resolution through legal or financial arrangements.