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Simple Guide on Bankruptcy. Introduction. Procedures for Filing Petition. Effects of Bankruptcy. Duties of a Bankrupt. Rights of Creditors. Distribution of Dividend. Discharge from Bankruptcy.Poor conditions in overall economy and the specific market in which a business operates are common causes of bankruptcy. The economy tends to follow a boom and bust cycle of rapid expansion.Federal bankruptcy laws govern how companies go out of business or recover from crippling debt. A bankrupt company, the “debtor,” might use Chapter 11 of the Bankruptcy Code to “reorganize” its.The American Bankruptcy Institute has created this site to help those in financial difficulty find out more about bankruptcy. We’ve put together a list of common questions and provided straightforward.