What are the circumstances that one must have in order to file for and
be awarded bankrupcy in this country (U.S.)?

Depends on a number of factors, what type of debtor? consumer?
company? municipality? farmer? If a consumer, what Chapter of
bankruptcy? Chapter 13 (debtor creates a plan to repay his/her debts
with future earnings) or Chapter 7 (where genarally all of consumer's
debts are eliminated but all assests minus the exemption are
taken/sold)?

The law recently changed in October 2005. Generally, for a consumer,
you must undergo financial counseling. There are asset and income
qualifications for Chapter 7 so you are generally forced into Chapter
13.  Once you clarify, your request, I can provide details.

HI Will,

As larkas mentioned there was a new Bankruptcy Law passed called "The
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005."

The law makes it more difficult for consumers to erase debt by forcing
more people to file under Chapter 13 bankruptcy rather than Chapter 7
bankruptcy. Debtors are subjected to a strict means test to determine
eligibility to file a Chapter 7 case. This potentially represents the
largest change to bankruptcy law is that there will now be a
"qualifying" test.

Under this two-part test, you will first be required to apply a
formula that exempts certain expenses such as food, rent, etc., to see
if you can afford to pay 25% of your ?non-priority unsecured debt?
(credit cards, medical bills, etc.). Second, your income will be
compared to your state?s median income. If your income is above your
state?s median income, and if you can afford to pay 25% of your
unsecured debt, you will not be allowed to file for Chapter 7
Bankruptcy.

You may be able to file for a Chapter 7 Bankruptcy if your income
falls below your state?s median income but you can pay 25 percent of
your unsecured debt. However, if the court believes you would be
abusing the system by filing a Chapter 7, you can be required to file
for a Chapter 13 Bankruptcy, instead.

You can get more info at http://www.credithelpguide.US