Curbing A Debtor’s “Absolute” Right To Convert

Law360, New York (March 23, 2007, 12:00 AM EDT) -- Although federal bankruptcy law and policy strongly encourage both business and individual debtors to pay at least a portion of their debts by means of either a plan of reorganization or a wage earner repayment plan, the general rule is that a debtor cannot be forced to do so—a debtor always has the option to liquidate its assets in Chapter 7 so long as it is eligible to be a debtor under that chapter of the Bankruptcy Code.

Even so, a trend appears to be developing...
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