Bankruptcy as a financial management is a legitimate proceeding involving a person or business that cannot repay outstanding debts. The general meaning of bankruptcy is where someone has a credit debt on which they are making payments and can no longer make those installments due to employment misfortune, investment losses in the market, or any type of income loss that prevents them to respect the installment schedule. The moment a person can no longer make these payments, they look for a finance company that specializes in bankruptcy. This company will attempt to negotiate a deal with the credit company and if that doesn't work they will file for bankruptcy. Are there any structures to fill out that include income, tax returns and are these criticisms valid? Why or why not? What responses or solutions do you have to address these criticisms? In light of the various articles I have read on bankruptcy, especially during the last financial crisis, one of the strongest criticisms of the regulatory framework is that entities filing for bankruptcy may only be failing on paper, but as a general rule they are definitely not. Likewise, the bankruptcy framework urges account holders to get and burn cash without the typical due perseverance since at the end of the day, the bankruptcy framework makes this borrower a choice of last resort while everything, the indebted debtor's investment plan falls . Yes, these criticisms are right. For example, so to speak, bankruptcy law refutes some granting and lending principles, such as the concept of collateral. The moment a creditor borrows money from a debtor and the debtor assigns property as collateral, and in this way the debtor documents bankruptcy protection, then the protection managed by the collateral is no longer as powerful as before. Due to the bankruptcy framework, the creditor's ability to obtain collateral may be delayed or impaired. This can lead to fickle investment and management behavior on the part of the indebted person in taking care of their assets. Fortunately, the 109th Congress recognized the legitimacy of the backlash against the bankruptcy framework by establishing the Bankruptcy abuse Prevention and Consumer Protection Act of 2005. This law makes it more difficult for businesses under Chapter 11 to expressly prevent abuse of the right bankruptcy.