The federal Bankruptcy Code is designed to provide a “fresh start” to a broad range of individual debtors (including spouses, who can file joint bankruptcy petitions). As the United States Supreme Court recognized almost 80 years ago, the bankruptcy process “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 preexisting debt.” Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This “opportunity” is made available to debtors by the bankruptcy discharge, which prohibits creditors from taking action against a debtor who has been relieved of personal liability for specific debts. The filing of a bankruptcy petition also provides a temporary “breathing spell” known as the “automatic stay,” which stops lawsuits, foreclosures, garnishments and most types of collection activities against a debtor.
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