What does insolvency mean?
Word: Insolvency
Part of Speech: Noun
Meaning: Insolvency means the state of not having enough money to pay the debts you owe.
Synonyms: bankruptcy, ruin
Word origin: Formed from in-, 'not', and a word that goes back to Latin solvere, 'to loosen' or 'pay off'.
How do you spell insolvency?
Syllables: in - sol - ven - cy
Tricky part: The sound before the y is written c, not s: insolvency, not insolvensy.
Watch out for: insolvensy, insolvencie
Memory tip: C for cash: an insolvent firm has run out of cash, and the s sound before the y is written with that c.
Insolvency in a sentence
Example 1: The airline faced insolvency after months of losses.
Example 2: The shopkeeper avoided insolvency by selling his second shop.
Example 3: The newspaper reported that the factory had declared insolvency.
Fun Fact
India passed the Insolvency and Bankruptcy Code in 2016 to give companies and lenders a time-bound way of dealing with unpaid debts.
Practise the CREST Way
Spell Spies
Choose the pair which has a spelling error:
a) frequency : frequent
b) emergency : emergent
c) insolvancy : insolvent
d) fluency : fluent
Show answer
c) insolvancy : insolvent. The noun keeps the e of its adjective, so insolvent gives insolvency.
Word Champ
Choose the correct word for the blank:
After two years of heavy losses and unpaid loans, the bus company was facing ___.
a) insolvency
b) investment
c) interest
d) income
Show answer
a) insolvency. Losses and loans it cannot repay push a firm towards insolvency; the other three are not troubles a firm faces in this way.
Word Puzzle
Match the words with their meanings:
1. insolvency 2. insolence 3. insomnia a. rude and disrespectful behaviour b. running out of money to clear what you owe c. being unable to sleep
a) 1-a, 2-b, 3-c
b) 1-b, 2-c, 3-a
c) 1-b, 2-a, 3-c
d) 1-c, 2-a, 3-b
Show answer
c) 1-b, 2-a, 3-c. These three all start with ins; insolvency is about money, insolence about rudeness and insomnia about sleep.
Word Tally
You get 2 marks for each correctly spelt word. How many marks will you get?
insolvency, finance, bussiness, mortgage, accountant
a) 4
b) 6
c) 8
d) 10
Show answer
c) 8. Insolvency, finance, mortgage and accountant are right, so 4 words earn 8 marks; business has a single s in the middle.
Multiple Choice Questions
1. What could push a shop towards insolvency?
a) hiring a new cashier
b) opening a second branch nearby
c) losing money month after month
d) winning a business award
Show answer
c) losing money month after month
2. A shop that has stayed clear of insolvency is one that can still ___
a) open on Sundays
b) sell to other countries
c) pay its bills on time
d) win a business award
Show answer
c) pay its bills on time
