insolvency (n.)

1590s, "unable to pay one's debts," from in- (1) "not" + Latin solventem "paying" (see solvent). Originally of one who was not a trader; only traders could become bankrupt.

abstract noun suffix of quality or rank, from Latin -cia, -tia, from Greek -kia, -tia, from abstract ending -ia (see -ia) + stem ending -c- or -t-. The native correspondents are -ship, -hood.

1700, "the breaking up of a business due to its inability to pay obligations," from bankrupt, "probably on the analogy of insolvency, but with -t erroneously retained in spelling, instead of being merged in the suffix ...." [OED]. Figurative use is attested from 1761. Earlier words for it (late 16c.-17c.) were bankrupting, bankruption, bankrupture, bankruptship.