Insolvency refers to a condition in which the available liquid assets of a company cannot meet the liabilities as required or desired. This may occur when the business is faced with too many debts to clear. business insolvency may arise because of calamities or bad decisions. However, the directors must not quickly run into the solution of having the business liquidated since another viable option exists. This is trying out recovery of the business by having to settle at a proposal to pay the money owed to the creditors. This proposal must however be discussed and agreed upon by a majority of the creditors (75%) in a meeting between the three parties (creditors, an insolvency practitioner, and the debtor). insolvency practitioners offer advice on developing the proposal by the ailing business, but the name of the practitioner to be involved in the deal must be mentioned while applying for insolvency.