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This is the first book to look at the whole history of federal bankruptcy law in America, from the creation of the first permanent statute in 1898 through the 1978 Bankruptcy "Code" and to the contemporary battles between creditors and debtors.

From a writer and thinker as gifted as Skeel, however, the book is a little disappointing, with much of it demonstrating little research, and some points and facts repeated ad nausem. Still, for those looking for a straight history, or just a good introduction to what bankruptcy law is in America, this provides lots of guidance and information. This book also provides a nice chronological extension of Bruce Mann's "Republic of Debtors" on colonial and early American bankruptcy law.

Skeel argues that it took so long to establish a permanent bankruptcy act in America because so many different politicians had different goals in pushing it. Some obviously wanted to help creditors and pushed for "involuntary" bankruptcy which could be imposed on debtors who committed certain "acts of bankruptcy"; others, often from the West and the South, wanted to help debtors and argued for enacting only "voluntary," or debtor-initiated bankruptcies. Skeel shows how these disagreements, and others, led American bankruptcy law to differ markedly from British, which it once imitated. While the Brits by 1883 created official bankruptcy administrators, who supervised debtors and divvied out claims, and who could refuse bankruptcy entirely or require more payments to anyone who came in, the 1898 act in America was created by people concerned about an imposition on states rights, and worried about another federal bureaucracy, so judges in America do most of the bankruptcy work (along with pseudo-judges, then known as bankruptcy "referees"). A similar concern lead these lawmakers to defer to states on their "exemption" laws, which shielded either a minimum amount of a debtor's income or property or, most often, land from creditors. The result was an act much less systematic and much kinder to debtors than anywhere else.

The next evolution of the law, the 1938 (Chandler) Bankruptcy Act, was created largely by then S.E.C. Chair and future Supreme Court Justice William Douglas. His main goal was the break up the "bankruptcy ring" centered around a few Wall Street law firms and banks that had monopolized most corporate reorganization filings and had supposedly charged exorbitant fees. The act thoroughly reformed corporate bankruptcy to be more like the British system, with federal "trustees" who would take over a company and administer it back to health, in what was then known as Chapter X. There was an outlet, however, for those firms who did not want a federal administrator, and that was Chapter XI, supposedly for small firms but gradually extended over time. The 1978 code broke this wide open, however, and allowed all sorts of corporations to file for reorganization, to the relief of almost all, who agreed that the trustees had prevented firms from ever filing from bankruptcy in the first place. The code also brought bankruptcy back to America's law schools and made it a respectable practice once again.

Skeel does do a good job showing the importance of bankruptcy law throughout U.S. history. For instance, he shows that the 1978 reforms in some ways lead to the explosion of corporate raiding and takeovers in the 1980s, since firms were more willing to take on debt and risk bankruptcy if they didn't have to worry as much about a federal trustee coming in and kicking out management. He also shows that the the U.S.'s bankruptcy practices' remain distinct from almost every other country, which often require draconian repayments and refuse discharges to most entering bankruptcy. His book provides a glimpse of why the US has the most generous and forgiving bankruptcy laws on Earth, and what that has meant for our country.