In what ways do bankruptcy laws benefit the economy as a whole?

The economic crisis that started in late 2007 led to a significant increase in bankruptcy filings by U.S. consumers and businesses. In 2008, bankruptcy filings by consumers were up by more than 30 percent. In the same year, 136 publicly traded U.S. companies filed for bankruptcy, an increase of 74 percent from a year earlier. In a typical month in 2009, about 100,000 consumers filed for bankruptcy protection. Bankruptcy in the United States is permitted under Article I, Section 8, of the U.S. Constitution, which authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States.” In your business law or legal environment course, you learn about the types of bankruptcy and their procedures. In contrast, in your economics courses, you learn about how bankruptcy law affects the behavior of individuals and businesses.