The final option for those with serious debt problems and no prospect of meeting their debts. A corporation, firm or individual is described as being 'bankrupt' when relieved from paying all debts once their assets have been surrendered to an appointed third party. Bankruptcy proceedings are managed via the court system, with the appointed third party designated by the court in charge of proceedings, in accordance with the Insolvency Act. The bankrupt is permitted to receive an allowance on which to live with the balance being reserved for the benefit of his or her creditors. Severe restrictions are placed on the bankrupt's financial activities. For example, the bankrupt is not permitted to hold a bank account or apply for credit in excess of £250 without the court's permission. After a period of two or three years, any remaining debts are written off.
