Legal Definitions - solvabilité

Solvabilité

Solvabilité is a French legal term that refers to the ability of an individual or a company to pay off their debts and financial obligations. It is a measure of financial stability and is often used by lenders and creditors to assess the creditworthiness of a borrower.

For example, if a company has a high level of debt and is struggling to make payments on time, it may be considered insolvent or lacking in solvabilité. On the other hand, if a company has a strong financial position with a healthy cash flow and low levels of debt, it is considered to have good solvabilité.

Another example is when an individual applies for a loan or a credit card. The lender will assess the individual's solvabilité by looking at their credit score, income, and other financial factors to determine whether they are likely to repay the debt on time.

Solvabilité is an important concept in finance and is used to determine the financial health of an individual or a company. It is a measure of the ability to meet financial obligations and is often used by lenders and creditors to assess the creditworthiness of a borrower. Good solvabilité is important for obtaining loans, credit, and other financial products, while poor solvabilité can lead to financial difficulties and even bankruptcy.