'insolvencia' originates from Latin, specifically the word 'insolventia', where 'in-' meant 'not' and 'solvere' meant 'to loosen; to pay'.

'insolvencia' changed from Late Latin word 'insolventia' and passed into Old Spanish/medieval Romance forms before becoming the modern Spanish 'insolvencia'.

Initially it conveyed the idea of 'not loosened/paid' (i.e., not discharged), but over time it narrowed to the modern sense of 'inability to pay debts' or a formal state of bankruptcy.