Three legal dichotomies involved.
1. State v. federal law. State law is important but it has to fit with b/r law. Ex. Exemption law is controlled by state and not federal law, and yet b/r law is supreme b/c of preemption. (Note that international law may also be implicated.
2. Consumer v. business: most of the provisions in b/r code apply to consumers and businesses, but they are two different worlds involving different policies. Note that for business b/r, the debtor may stay in control of business. This makes sense in an environment where the entire economy is in trouble—you can’t necessarily blame management for a failing business in that case.
3. Sellout v. payout b/r: Sell-out: trustee gathers all non-exempt prop, sells and pays off all of creditors. Pay-out—debtor will keep assets, and pay off creditors over time with future income. We have pay-out b/r b/c creditors have the hope that they will be paid more than they would if there was liquidation b/r. Note that secured creditors would just assume skip pay-out b/c they are secured.
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