Last year a new bankruptcy law came into effect, but it is incomplete and poorly understood.

ECONOMIST: Bankruptcy in China

But all the stakeholders suffered during GM's bankruptcy, so this effect may be small.

ECONOMIST: General Motors: Government Motors no more | The

The finding of the bankruptcy court has no effect.

FORBES: Fallen Solyndra Won Bankruptcy Battle But Faces Tax War

Under the new bankruptcy laws, which took effect on Oct. 17, companies have to meet more stringent requirements before having the luxury of wiping their debts clean.

FORBES: Small Biz Bum Alert

The case is set to be a big test of China's new bankruptcy law, which came into effect in 2007 but has rarely been applied to overseas-listed companies with assets in China.

CNN: Top solar panel maker goes bankrupt

But absent a bankruptcy, Charles Darwin might have the same effect.

FORBES: Magazine Article

The increase in bankruptcies has been attributed to the Bankruptcy and Diligence Act (2007) which came into effect this year.

BBC: Scottish bankruptcies up by 162%

But a new obstacle has arisen: Congress has approved two bills whose effect is to reverse the recent repeal of a bankruptcy law which favoured debtors at the expense of banks.

ECONOMIST: Argentina's collapse: Sifting through the rubbish | The

The new insurance law, expected to take effect next month, will force policyholders, who in bankruptcy proceedings take precedence over holders of subordinated debt, to lose out first.

ECONOMIST: A costly week for ordinary Japanese

Because bankruptcy laws attempt to overcome this market failure, they are, in effect, a state-imposed system of universal financial-distress insurance.

ECONOMIST: America goes bust

In effect, U.S. taxpayers can pay for a bailout of the industry or its bankruptcy.

FORBES: Magazine Article