If a person is not able to pay his dues in ordinary course of business then he will be called insolvent. The person is not able to meet his liabilities in ordinary course of business, he is facing liquidity problem. So if the assets of a person are not sufficient to pay his liabilities is called insolvency of that person. E.g Mr. X has total assets value US$ 100000 while his liabilities are US$ 125000 Mr. X will be called insolvent person.
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