Bankruptcy law provides for the development of a plan that
allows a debtor, who is unable to pay his creditors, to resolve
his debts through the division of his assets among his
creditors.The philosophy behind the law is to allow the debtor
to make a fresh start, not to be punished for inability to pay
debts. Bankruptcy law allows certain debtors to be discharged of
the financial obligations they have accumulated, after their
assets are distributed, even if their debts have not been paid
in full. Some bankruptcy proceedings allow a debtor to stay in
business and use business income to pay his or her debts.
Bankruptcy law is federal statutory law contained in Title 11 of
the United States Code. Congress passed the Bankruptcy Code
under its Constitutional grant of authority to "establish. . .
uniform laws on the subject of Bankruptcy throughout the United
States." See U.S. Constitution Article I, Section 8. States may
not regulate bankruptcy though they may pass laws that govern
other aspects of the debtor-cred