If they can't meet their liabilities when due that means they don't have the necessary assets to meet their liabilities.

They would say they had the assets, but could not access them.

The two tests are of "solvency" and "liquidity".

I can own a house worth £1m and owe £100.00 secured on it. My net assets are £999,900, so I am "solvent" using the assets vs liabilities test.

But if I have zero income, and hence cannot repay either the £100.00 or even the interest on it, then I fail the second (liquidity) test, and the house will be "repossessed" or "foreclosed"