You are insolvent when your liabilities are more than your assets. When considering your assets, you include all income, properties, vehicles, cash in the bank, investments etc. Liabilities are all your debt.
If you want to remain solvent, you must be in a position where your assets are more than your liabilities. When you are insolvent, you can apply for sequestration, which is a process where your assets are sold to offset your liabilities.
Usually, your creditors must get a specific percentage of the proceeds of the sale of your assets. After this, you will not be able to apply for credit for five years, after which you can apply for a rehabilitation order. There are alternatives such as Debt Review, which you should consider first before applying for sequestration.