Formal insolvency
A statutory insolvency procedure, such as liquidation, administration, bankruptcy or another legally defined insolvency process.
Related terms
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Insolvency
A financial state in which a person or business cannot meet debts as required, or a company meets another statutory insolvency test. It is not the same thing as liquidation.
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Bankruptcy
A formal personal insolvency process that deals with debts a person cannot pay, while placing their assets and financial affairs under legal rules and oversight.
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Liquidation
A formal process that closes a company, realises its assets and distributes available funds to creditors before the company is dissolved.
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