B. Goals of the Bankruptcy System

The Supreme Court has described the purpose of the bankruptcy system as promoting a fresh start for debtors:

The federal system of bankruptcy is designed not only to distribute the property of the debtor, not by law exempted, fairly and equally among his creditors, but as a main purpose of the act, intends to aid the unfortunate debtor by giving him a fresh start in life, free from debts, except of a certain character, after the property which he owned at the time of bankruptcy has been administered for the benefit of creditors. Our decisions lay great stress upon this feature of the law--as one not only of private but of great public interest in that it secures to the unfortunate debtor, who surrenders his property for distribution, a new opportunity in life.

In addition to the benefit the debtor receives from the opportunity to begin anew, there are also broader benefits to society. The current bankruptcy system can be viewed as a direct outgrowth of the United States' capitalist system, which seeks to encourage entrepreneurial activity. The system is also to the benefit of creditors, as it aims to establish an orderly distribution of the debtor's assets, thereby promoting equality among creditors.