I keep reading about people and companies filing for bankruptcy these days. Particularly GM and Chrysler. What exactly happens when someone files for bankruptcy? People say that it’s something you want to avoid if at all possible, but I’ve also heard Bush say that it’s a good thing for the auto companies to do in order to reorganize their companies. Now I’m no Bush fan but there’s got to be SOME substance to what he said (maybe?) as his economic advisers are saying this is a good idea. Why does Bush say this is a good idea while many other leaders say it’s a bad idea?

I’ve also read comments from "regular" people who say that the Big Three should be left to go bankrupt and clean up their own mess. But that this would cause tons of people to lose their jobs.

I’ve looked up the dictionary definition of bankruptcy as well as the wiki page and I’m still confused. I need someone to give me a very simple explanation about what bankruptcy is and what is going on right now in the US. Please help me understand this!

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