Beleaguered Ambac Financial Group (ABK) filed for relief from its debt under Chapter 11 Monday in the United States Bankruptcy Court for the Southern District of New York. The announcement was anticipated. Ambac will continue to operate in the ordinary course of business as “debtor-in-possession” under the jurisdiction of the Bankruptcy Court. The board last month elected not to make interest payments on debt due May 1, 2023. Ambac would default under the agreement if no interest is paid within 30 days, which would allow noteholders to call the debt. "The Company was unable to raise additional capital as an alternative to seeking bankruptcy protection and was also unable to agree to terms with an ad-hoc committee of certain senior debt holders in order to restructure its outstanding debt through a prepackaged bankruptcy proceeding," Ambac said in a statement. As of June 30, 2010, the bond insurer had debt outstanding amounting to $1.6 billion according to a Form 8-K filed by Ambac with the SEC. Write to Jacob Gaffney. The author holds no relevant investments.