If you have been wondering about the the origin of the phrase….”…the honest but unfortunate debtor…”, below should provide the roadmap.
In 1877, Justice Harlan in Neal v. Clark said:
“Such a construction of the statute is consonant with equity and consistent with the object and intention of Congress in enacting a general law by which the honest citizen may be relieved from the burden of hopeless insolvency. A different construction would be inconsistent with the liberal spirit which pervades the entire bankrupt system.”
From there, other Supreme Court Opinions began to take that philosophy and expand upon it…..
In 1918, the Court in Stellwager v. Clum said, the federal system of bankruptcy’s …. main purpose…intends to aid the unfortunate debtor by giving him a fresh start in life, free from debts…
Then in 1934, the Court in Local Loan v. Hunt said, “this purpose of the act has been to …give the honest but unfortunate debtor who surrenders for distribution the property which he owns at the time of bankruptcy a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”