The purpose of bankruptcy is to give a “fresh start” to honest, hard-working, but unfortunate people just like you.
But don’t take it from us… Bankruptcy was created by the United States government, so let’s take a quick look at why bankruptcy was created, and what it’s meant for. Here are quotes taken from actual U.S. Supreme Court cases:
The principal purpose of the Bankruptcy Code is to grant a ‘fresh start’ to the ‘honest but unfortunate debtor’.
2007 – Marrama v. Citizens Bank of Massachusetts, 127 S.Ct. 1105
The central purpose of the Bankruptcy Code is to provide a procedure by which certain insolvent debtors can reorder their affairs, make peace with their creditors, and enjoy ‘a new opportunity in life with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
1991 – Grogan v. Garner, 111 S.Ct. 654
One of the primary purposes of the Bankruptcy Act is to ‘relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start a fresh free from the obligations and responsibilities consequent upon business misfortunes’. This purpose of the act has been again and again emphasized by the courts as being of public as well as private interest, in that it gives to the honest but unfortunate debtor…, a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt.
1934 – Local Loan Co. v. Hunt, 54 S.Ct. 695
It is the purpose of the bankrupt act…to relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.
1915 – Williams v. U.S. Fidelity & Guaranty Co., 35 S.Ct. 289