When an individual is consistently unable to pay their debts, they are considered to be insolvent. The people or companies they owe money to can apply to a court of law to have the individual declared bankrupt, or the individual can request the court to declare them bankrupt. This means that all the assets owned by this person can be sold to pay off some of the debts. Most importantly, the bankrupt individual will now be protected by law and cannot be harrassed by creditors. However, bankruptcy has severe consequences for the individual and is therefore considered as a last resort to solving the problem of over indebtedness.