Abstract: Personal bankruptcy is an important constituent part of the bankruptcy system. Looking back on the process of Chinese bankruptcy legislation, the research of personal bankruptcy has always been an important perspective of civil law studies. The personal bankruptcy system is an important link in the improvement of China’s market economic system with socialist characteristics, to analyze personal bankruptcy from the perspective of law and economics can discover the economic principles of personal bankruptcy: someone occupies in advance a part of utility level that does not belong to him. Based on this bankruptcy principle, the basic methods and principles of personal bankruptcy system must be followed:“loss of the right”, i.e., through a specific punitive way to reduce the bankrupt individual’s utility level. Different from enterprises, a person has other social attributes and functions, what they need more is “to restore their rights”, so as to ensure their personal rights.

Key words: personal bankruptcy; economic analysis; utility level; loss of the right; restoration of the right