What is the consequence of having current liabilities greater than liquid assets?

When current liabilities exceed liquid assets, it signifies that an individual does not have enough easily accessible funds to pay off their short-term debts and obligations. This situation is often described as being over-leveraged, meaning the individual has taken on too much debt relative to their available liquid resources.

When someone is over-leveraged, they face potential financial difficulties, including increased risk of defaulting on debts, trouble in meeting their financial obligations, and reduced financial flexibility. Without sufficient liquid assets, the individual may struggle to cover unexpected expenses, leading to added stress and possible long-term financial instability.

The other options do not align with the implications of having current liabilities that surpass liquid assets. A healthy financial status typically reflects a balance where liquid assets comfortably cover liabilities, not the opposite. A savings surplus indicates a positive potential for saving and investing, rather than an imbalance between debts and available cash. Qualifying for more credit tends to rely on a positive debt-to-income ratio and overall creditworthiness, which would generally be undermined by being over-leveraged.