The original Bankruptcy Act was enacted in 1878. Unlike European countries, American debtors were not punished in any way. Our founders viewed bankruptcy from a different perspective; therefore, they included a provision in the U.S. Constitution, which gives Congress the authority to establish uniform bankruptcy laws. The primary purpose of the Bankruptcy Code is to provide debtors an opportunity for a fresh start'. In order to have a fresh start the debtor is relieved from legal responsibility of past debts.
Under the code, debtors are protected against abusive creditor activities. Once a voluntary or involuntary petition is filed, certain actions by creditors are suspended under automatic stay. Both secured and unsecured creditors are suspended from taking any action against the debtor or the debtor's property. However, actions to recover child support or alimony are not suspended.
In a situation in which there are both secured and unsecured creditors, there is a special......
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