Most studies which have explored the nature and determinants of asset portfolio allocations have defined risk in terms of asset price volatility and have ignored the influence of insolvency risk on portfolio choice. The present study adds to the literature by exploring the influence of financial solvency and tolerance for asset price volatility on the shares of the household asset portfolio allocated to classes with different liquidity and risk-reward characteristics. Results suggest that financial solvency risk constrains asset portfolio choices, and that individuals with health problems exhibit a propensity to accept substantial risks by leveraging investments in financial assets with debt. The present results also suggest that financial planners should develop educational materials and assessment tools that explicitly cross-classify debt and asset types to better understand the overall risk exposure of client portfolios. Implications for health policy, retirement income security assistance, and for serving “middle market” consumers of investment advice are discussed.