GD Accounting Glossary
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Insolvency

Being unable to pay debts as they fall due — the trigger for administration, liquidation, or restructuring.

Insolvency means debts can\'t be paid as they fall due. Warning signs include maxed credit lines, unpaid superannuation and tax, and paying old bills with new sales revenue.

Options narrow significantly with delay: early advice can mean restructuring and survival; late discovery usually means administration or liquidation. If the signs are present, seek advice early.

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