What context can I use each word in?
Learn when and how to use these words with these examples!
illiquidity
Example
The real estate market is experiencing illiquidity due to a lack of buyers. [illiquidity: noun]
Example
The company faced illiquidity when it was unable to pay its suppliers on time. [illiquidity: noun]
insolvency
Example
The company filed for insolvency after it was unable to pay its creditors. [insolvency: noun]
Example
The individual declared insolvency after accumulating too much debt. [insolvency: noun]
Good things to know
Which word is more common?
Insolvency is a more common term than illiquidity in everyday language, as it is a legal status that is often reported in the news. Illiquidity is a less common term that is used primarily in financial contexts.
Whatโs the difference in the tone of formality between illiquidity and insolvency?
Insolvency is a formal term that is used in legal and financial contexts. Illiquidity is also a formal term but is less commonly used outside of financial circles.
