Code § 527(a)(1) & § 342(b)(1)

The United States Constitution provides a method whereby individuals, burdened by excessive debt, can obtain a fresh financial start and pursue newly productive lives unimpaired by the past financial problems.  It is an important alternative for persons mired deep in financial difficulty.

The federal bankruptcy laws were enacted to provide debtors with a fresh start and to establish a ranking and equity among all the creditors who are clamoring for the debtor's limited resources.  Bankruptcy helps people avoid the kind of permanent discouragement that can prevent them from ever reestablishing themselves as hard-working members of society.  Also, creditors are ranked so that the debtor's nonexempt property can be fairly distributed according to established rules guaranteeing identical treatment of all creditors of the same rank.

What Bankruptcy Can and Cannot Do Discharge liability for most debts to get a fresh start.   Stop foreclosure action on their home and allow them an opportunity to catch up on missed payments.   Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.   Stop wage garnishment and other debt collection harassment, and give the individual some breathing room.   Restore or prevent termination of utility service.   Lower the monthly payments on debts, including secured debts such as car loans.   Allow debtors an opportunity to challenge the claims of certain creditors who have committed fraud or who are otherwise seeking to collect more than they are legally entitled to.   Bankruptcy, however cannot cure every financial problem.