What context can I use each word in?
Learn when and how to use these words with these examples!
insolvency
Example
The company declared insolvency after failing to pay its creditors. [insolvency: noun]
Example
The business owner faced insolvency due to poor financial management. [insolvency: noun]
default
Example
The borrower defaulted on their mortgage payments, leading to foreclosure. [defaulted: past tense verb]
Example
The company was sued for defaulting on its contract with the supplier. [defaulting: gerund or present participle]
Good things to know
Which word is more common?
Default is more commonly used in everyday language, especially in the context of loans and contracts. Insolvency is more technical and formal and is typically used in financial and legal contexts.
What’s the difference in the tone of formality between insolvency and default?
Insolvency is a more formal term than default, which is more versatile and can be used in both formal and informal contexts.
