overleveraging
Too much debt
Overleveraging is the condition of having taken on too much debt relative to one's assets or ability to repay.
The term comes from finance, where leverage means using borrowed money to amplify potential returns—but also potential losses.
A company or individual who overleverages has borrowed so aggressively that even minor setbacks can trigger insolvency.
The housing crisis exposed how many homeowners had overleveraged themselves with adjustable-rate mortgages.
The verb overleverage and adjective overleveraged follow the same pattern.
Preset standard option
- insolvencyInability to pay debts
- exposureState of being unprotected
- undercapitalizedLacking sufficient financial resources
- contagionDisease spread by contact
Temporary taking of another's
- creditRecognition or payment deferral
- loansBorrowed money arrangements
- liabilitiesAmounts owed to others
- indebtednessState of owing money
financing · mortgages · margin · gearing · debt-to-equity · loan-to-value · refinancing · repayments
Legal status when insolvent
- liquidationSelling assets for cash
- foreclosureLender seizes mortgaged property
- restructuringRearranging an existing framework
- receivershipCourt-ordered asset management
bailout · write-down · haircut · fire-sale · distressed · workout · Lehman · impairment
Ease of breaking
- instabilityTendency toward unpredictable change
- precariousnessState of uncertain stability
- exposureState of being unprotected
- susceptibilityLiability to influence
Things derived from another
- hedgingNoncommittal maneuvering
- short-sellingBetting against a stock
- speculationUnproven theorizing or risky investment
- boom-bustCyclical economic volatility
default
Preset standard option
- insolvencyInability to pay debts
- exposureState of being unprotected
- undercapitalizedLacking sufficient financial resources
borrowing
Temporary taking of another's
- creditRecognition or payment deferral
- loansBorrowed money arrangements
- liabilitiesAmounts owed to others
indebtedness · financing · mortgages · margin · gearing · debt-to-equity · loan-to-value · refinancing · repayments · interest
bankruptcy
Legal status when insolvent
- liquidationSelling assets for cash
- foreclosureLender seizes mortgaged property
- restructuringRearranging an existing framework
receivership · bailout · write-down · haircut · fire-sale · distressed · workout · Lehman · impairment · wind-down
fragility
Ease of breaking
- instabilityTendency toward unpredictable change
- precariousnessState of uncertain stability
- exposureState of being unprotected
susceptibility · overextension · weakness · brittleness · sensitivity
derivatives
Things derived from another
- hedgingNoncommittal maneuvering
- short-sellingBetting against a stock
- speculationUnproven theorizing or risky investment
- money mistakesoverspending, impulse buying, gambling debt, debt spiral, no savings
- economic problemsmarket failure, recession, inflation, deflation, stagflation
- housing crisishousing bubble, housing crash, subprime mortgages, foreclosures, subprime loans
- investment pitfallsovertrading, panic selling, overconfidence, poor timing, herd mentality
- credit risksdefault, bankruptcy, late payments, bad debt, foreclosure
- market bubblesbubble, asset bubble, tulip mania, dot-com bubble, housing bubble
overleveragingdeleveraging
Lowering financial leverage ratios
debt-free · paying down debt · debt reduction · capital preservation · risk aversion
overleveragingfinancial prudence
Careful management of money
fiscal conservatism · risk aversion · creditworthiness · financial stability · solvency
lever, leverage, leveraged, leverages, leveraging, deleverage, overleveraged, deleveraging, overleverage