Bankruptcy 101

The United States Constitution grants Congress the power to establish “uniform laws on the subject of bankruptcies throughout the United States.” U.S. Const., Art. 1, § 8, cl. 4. Federal bankruptcy laws are codified under title 11 of the United States Code, which is commonly referred to as the “Bankruptcy Code.” Congress’s stated goal of enacting the Bankruptcy Code was (i) equality of distribution among creditors and (ii) orderly rehabilitation or liquidation. H.R. Rep. No. 95-595, 95th Cong., 1st. Sess. 16, 177-78, 220 (1977).

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