Bankruptcy Powers: Congress has the power to establish uniform bankruptcy laws. Bankruptcy is the legal proceeding that a person's debt is erased as his assets are distributed to those to whom he owes. The power to regulate bankruptcy is concurrent - that is carried out at the state level as well. Jun 04, · The history of bankruptcy in the U.S. dates back to the s, having been adopted from English common law. Originally, bankruptcy was viewed as a quasi-criminal act. In , Congress was given power to legislate bankruptcy laws according to the Constitution. Congress eventually adapted bankruptcy law to helping individuals and businesses. The Bankruptcy Clause of the Constitution was one of Congress's several delegated powers in Article I, Section 8, that were designed to encourage the development of a commercial republic and to.