A system and method for advertising out-of-resources (OOR) conditions for entities, such as nodes, line cards and data links, in a manner that does not involve using a maximum cost to indicate the entity is “out-of-resources.” According to the technique, an OOR condition for an entity is advertised in one or more type-length-value (TLV) objects contained in an advertisement message. The advertisement message is flooded to nodes on a data network to inform them of the entity's OOR condition. Head-end nodes that process the advertisement message may use information contained in the TLV object to determine a path for a new label switched path (LSP) that does not include the entity associated with the OOR condition.