Bankruptcy serves a vital role that makes financing possible. Without an orderly process for unwinding a business when there are not sufficient assets to satisfy all claims, it would be chaos, and whoever goes first could screw everyone else. This would make capital too expensive, as everyone would need excess returns to cover the risk.
For me the big issue is that student loans are not forgivable in bankruptcy. Even though they are often what drives someone into bankruptcy. This is bad because it means the backer of those loans (the government) need have no discipline in making the loans.
The idea that if you extend credit to someone who cannot pay it back means you will lose money, acts as a natural governor on making dumb loans. Remove that governor and we get loans made to people for garbage degrees at for profit universities that will never result in good jobs, or any job at all, and universities inflating tuitions to unsustainable degrees.
Allow student loan forgiveness in bankruptcy and a lot of problems we currently have will correct themselves over time.