Since 1996, more than one million people a year have filed for bankruptcy in the United States. Most seek debt forgiveness in exchange for liquidating their assets for the benefit of their creditors. The rest seek assistance from bankruptcy courts to reach an agreement with their creditors. The law hasn't always been so kind to insolvent debtors.
For most of the 19th century, there was no bankruptcy law in the United States, and most debtors found it impossible to receive debt forgiveness. At the beginning of the century, debtors could have expected even harsher treatment, such as imprisonment for debts. For some people or companies, unfortunately, bankruptcy is the right choice. If debts become too large to manage, the alternative could be the liquidation of all your assets and legal rulings for non-payment or breach of contract.
While it's harmful to your credit and reputation, bankruptcy is a legal channel to avoid the worst of the cases described above. The purpose of chapter 15, entitled Auxiliary cases and other cross-border cases, is to provide an effective mechanism for dealing with cases of cross-border insolvency. The Democratic Party supported bills that were purely voluntary (creditors could not initiate proceedings) and temporary (the law would only remain in effect for a few years).
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