Solvency Legal Meaning and Definition

Here is a simplified definition of the legal term Solvency.

Solvency (noun): This term refers to the condition where an individual or entity's assets (what they own or have) exceed their liabilities (what they owe to others). Solvency is the opposite of insolvency, which is when a person or business can't meet their debt obligations because their assets are less than their liabilities. It's a fundamental measure of financial health.