Bankruptcy in the United States

Bankruptcy is a legal declaration of the incapacity of an individual or organization to pay its creditors. Creditors may also file a bankruptcy declaration against a debtor, or known as involuntary bankruptcy to recover a portion of what they are due. However, in majority of bankruptcy petitions, it is the debtor who initiates or declares a voluntary bankruptcy (General Business Provisions, 2008).

The declaration of bankruptcy in the United States is allowed in the Constitution as stated in Article 1, Section 8, Clause 4, which permits the Congress to legislate laws that cover bankruptcies all over the United States. The most recent adaptation of this authority of Congress was the passage of Bankruptcy Reform Act of 1978, codified in Title 11 of the United States Code (Carruthers & Halliday, 1998, p. 49). This provision is most commonly known as the Bankruptcy Code or simply as the Code. It has also been revised numerous times; the newest amendment was in 2005 through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (US Courts, 2009).

Majority of bankruptcy petitions in the United States are personal or individual bankruptcies that are filed under Chapter 7 or the basic liquidation for individuals and businesses; or Chapter 13 or the rehabilitation with a payment plan for individuals with a regular source of income, of the Bankruptcy Code (Carruthers & Halliday, 1998, p. 55). Almost 65% of U.S consumer bankruptcy petitions fall under Chapter 7 (US Courts, 2009). Recently, the major financial crisis that hit the country has led to bankruptcies and closures of large banking and financial institutions (de Burca, 2008).

The collapse of the housing industry in America, as often cited by economists, started the financial crisis of the United States in 2007. It started when the loss of confidence on investments and securities resulted to the collapse of major financial and banking institutions (de Burca, 2008). The peak of the crisis was the downfall of Lehman Brothers Holdings Inc., who held an asset worth $639 billion. Its collapse came a week after the multi-billion dollar rescue of two largest mortgage firms Freddie Mac and Fannie Mae (Greenhouse, 2009).

Numerous companies in the manufacturing and service sectors were also affected by the crisis and resulted to massive lay-offs of workers. According to the U.S Department of Labor (2009), the unemployment rate for February of this year reached 8.1% as compared to the 6.2% that was recorded in September 2008. The Bureau of Labor Statistics (2009) reported the highest rate of layoff of workers for the fourth quarter of 2008, involving 508,859 workers. This statistics represents an increase of 65% from the same period last year.

The financial crisis pose a major threat on the political stability of the country and internationally for it already affects numbers of economies abroad. Workers and citizens are conducting protests in major cities in the country calling for job security, worker’s rights and call for government’s action towards the crisis. Since February 2009, an Economic Intelligence Briefing was adjoined to the everyday briefings arranged for the President (Warrick, 2009). This proves that the crisis is a serious threat to national stability (Greenhouse, 2009).

As of February 2008, the government provided through the Congress a $168 billion package of tax cuts and rebates as part of the economic stimulus. In January 28, 2009, President Barack Obama signed an $819 billion stimulus plan which is part of the recovery package by his administration (Washington Post, 2009). These fiscal policies from the government aim to cushion the effect of the financial crisis on the U.S economy.


  1. Carruthers, Bruce G. & Halliday, Terrence, C. (1998). Rescuing Business: The Making of Corporate Bankruptcy Law in England and the United States. Oxford: Oxford University.
  2. de Burca, D. (2008, September 16). Panic Monday; World’s Biggest Financial Crisis in Almost 80 Years Thousands of Workers to Lose Their Jobs Shares Plummet after US Bank Goes Bust in Black Day. The Mirror (London).
  3. General Business Provisions. (2008). Journal of Accountancy, 206(2).
  4. Greenhouse, S. (2009, February, 13). Record High Mass Layoffs. Economix. Retrieved March 25, 2009, from
  5. United States Department of Labor. (n.d). Economy at a Glance. Bureau of Labor Statistics. Retrieved March 25, 2009, from
  6. US Courts. (2009). Bankruptcy Statistics. Retrieved March 25, 2009, from
  7. Warrick, J. (2009, February 26). White House Given First Daily Briefing. Washington Post. Retrieved March 25, 2009, from
  8. Washington Post. (2009, March 25). Economic Stimulus. Retrieved March 25, 2009, from

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyStudyWriters
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
excellent job! got an A, thank you
Customer 452773, May 24th, 2023
Thank you
Customer 452811, February 17th, 2024
Business and administrative studies
Excellent job
Customer 452773, March 9th, 2023
Thank you for your hard work and help.
Customer 452773, February 13th, 2023
Human Resources Management (HRM)
excellent job
Customer 452773, June 25th, 2023
Business and administrative studies
Thank you
Customer 452773, March 19th, 2023
Business and administrative studies
excellent job thank you Your Score 166.25/ 175- A 1. Current Culture 15% of total grade 18.37 Criterion "1. Current Culture" has textual feedback Criterion Feedback I see interesting points, though, in general they are not about the culture.
Customer 452773, June 4th, 2023
Business and administrative studies
Excellent work ,always done early
Customer 452773, February 21st, 2023
English 101
great summery in terms of the time given. it lacks a bit of clarity but otherwise perfect.
Customer 452747, June 9th, 2021
Business Studies
Thank you very much for a good job done and a quick turn around time.
Customer 452615, March 31st, 2021
Business and administrative studies
Excellent job
Customer 452773, March 17th, 2023
Business and administrative studies
excellent work
Customer 452773, March 9th, 2023
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp