The key thing with bankruptcy is that if all debts are recorded on the blockchain (or at least the secured ones), then there is no question as to who the creditors are, how much they are owed, what their seniority is, etc. So it would simplify a lot of the process.

Come to think of it, you could turn unsecured debt into secured debt by issuing a class of tokens. So if a business buys 10,000 of inventory on net-90 terms then the business could issue a corresponding amount of tokens to the vendor to be reclaimed when the bill is paid. That would probably require that the vendor be paid in crypto in the first place though.