Social and Behavioral Sciences Commons^™

Reconceptualizing Present-Value Analysis In Consumer Bankruptcy, Rafael I. Pardo

Scholarship@WashULaw

During the three decades following the enactment of the Bankruptcy Code, courts and commentators have been vexed by the problem of determining the present value of future payments to creditors proposed in a debtor’s repayment plan. The central issue to this problem has been the discount rate to be applied when conducting present-value analysis. While the Code unmistakably requires the discounting of future payments as part of the process for confirming a repayment plan, the Code does not explicitly specify the rate itself or the manner in which the rate should be calculated. No uniform rule of decision has emerged …