The McCarthy v. Arndstein case in 1922 revolved around the issue of self-incrimination within bankruptcy proceedings. The defendant, Israel Arndstein, was a bankrupt individual who refused to answer certain questions during his examination on the grounds that his answers could potentially incriminate him criminally. He invoked the Fifth Amendment which protects against self-incrimination. The United States Supreme Court ruled in favor of Arndstein stating that he had a right to refuse answering any question if it might lead to criminal prosecution under federal law or state law and thus upheld his claim for protection under the Fifth Amendment's privilege against self-incincrimination even though he was involved in civil bankruptcy proceedings.

In the dissenting opinion for McCarthy v. Arndstein, Justice McReynolds argued that the majority's decision to grant a Fifth Amendment privilege against self-incrimination to bankrupts was misguided and could lead to abuse of this protection. He contended that such an interpretation would allow individuals facing bankruptcy proceedings to refuse answering any questions about their financial affairs on grounds of potential self-incrimination, thereby obstructing creditors from obtaining necessary information. Furthermore, he believed it contradicted previous court rulings which had limited this constitutional right in civil cases and warned it might encourage dishonesty among debtors by providing them with a legal shield against scrutiny into fraudulent activities.