The right to file bankruptcy is protected by federal case law upholding the policy that all parties have a right to avail themselves with the fresh start afforded by the US Bankruptcy Code, and the right cannot be waived. See Hayhoe v Cole (In re Cole), 226 B.R. 647, 651-54 (B.A.P. 9th Cir. 1998). Yet, in reviewing the evolution of the law during the 1990s through the present date, that right, especially for real estate borrowers, seems to have been diminished as a result of innovative lenders, creative financing documents, and also changes to the Bankruptcy Code that limit real estate borrowers’ access to and reliance on the benefits of the Bankruptcy Code. This article traces the developments that have affected the rights of real estate borrowers to file bankruptcy to protect their assets.
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