Definition
The state or condition of being morally bankrupt; unethicality.
How People Actually Use It
n. 1. A declaration at some point during the evening (it may be declared by friends or a self-declaration), that you are now totally lacking in moral principles or quality for the remainder of the evening; Unscrupulous; 2. Depleted of valuable qualities or characteristics
"Yo, my man has a wedding ring and is grinding on everybody in this club... I guess he's declared moral bankruptcy. Friend: That girl is hella drunk. Since I already declared moral bankruptcy, I'm calling dibs. You: Damn son, you are one grimy son of a bitch."
Source: Urban Dictionary