Insolvency is when an individual or organization is unable to meet its outstanding financial
debt towards its lender as it become due. Insolvency can be resolved by way of changing the
repayment plan of the loans or writing off a part thereof. If it cannot be resolved, then a legal
action may lie against the insolvent and its assets will be sold to pay off the outstanding
debts. Generally, an official assignee/liquidator appointed by the Government of India,
realizes the assets and allocates it among the creditors of the insolvent.