The secured transactions law creates a system that interacts with the default and enforcement of claims against a bankrupt or insolvent debtor. Two major bodies of law control the legal relationships in this area in the United States. The first such body of law is the state law in each of the states dealing with collateral. The second important body of law is the United States federal bankruptcy law.
Many states also have laws providing for state court administered receiverships.
These receivership laws exist primarily to facilitate management of properties or to facilitate entire businesses and management of businesses that are not permitted or enabled to make use of the federal bankruptcy code, such as insurance companies and radio stations. B. Discussion 1. The United States Bankruptcy Code Bankruptcy law is United States federal law. 71 Title 11 of the United States Code, also known as the Bankruptcy Code, contains most of the statutory law applying directly and specifically to bankruptcy cases. However, bankruptcy cases are also controlled by the Federal Rules of Bankruptcy Procedure.