The right to bankruptcy is a constitutional right. It is found in the United States Constitution in Article I, Section 8, Clause 4.

Bankruptcy law is federal law, which means that the Bankruptcy Code applies uniformly to all bankruptcy filings throughout the United States.

According to the Administrative Office of the U.S. Courts, in 1980 there were 43,694 business bankruptcy filings, or about 13 percent of total bankruptcy filings. In 1990, there were 64,853 business bankruptcy filings, or about 8 percent of total bankruptcy filings. In 1999, there were 44,367 business bankruptcy filings, or about 3 percent of total filings.

There are no "debtor's prisons" in the United States. You generally cannot go to jail for failing to pay your debts. However, defrauding your creditors can result in a criminal prosecution. Giving your bank a fraudulent loan application, for example, or hiding assets from your creditors can be crimes. Also, filing false information or testifying falsely in a bankruptcy proceeding is bankruptcy fraud-a federal crime.

Many large companies and famous people have filed bankruptcy, including Texaco, Macy's, T.W.A, Penn Central, Jerry Lewis, Mickey Rooney, Tammy Wynette, and former Treasury Secretary John Connelly.

Chapter 11 proceedings create substantial benefits to the community. When a failing business is allowed to restructure, valuable jobs are preserved, communities are allowed to maintain their tax base, and the "domino effect" of economic failure to the Chapter 11 debtor's suppliers and vendors can be prevented.