i. Insolvency refers to the state where an individual or entity is unable to meet financial obligations as they become due, with liabilities exceeding assets. (2 Marks)

ii. FOUR consequences of Insolvency:

1. Exposure to bankruptcy petitions filed by creditors.
2. The insolvent person can be sued by creditors for debt recovery.
3. Assets may be transferred to a trustee in bankruptcy.
4. The individual may face harassment and embarrassment from creditors. (4 Marks)