Prior to the enactment of the Bankruptcy Code in 1978, courts generally determined that a debtor's obligations to pay interest stop accruing as of the petition date. Section 502(b)(2) of the Bankruptcy Code prohibits the inclusion of "unmatured interest" in an allowed claim. Pre-Code common law recognized a so-called "solvent debtor" exception, whereby a solvent debtor continued to incur obligations to pay interest accruing after filing its bankruptcy petition.

The Bankruptcy Code provision has been a point of contention when a solvent debtor prosecutes and confirms a plan that does not provide for the payment of post-petition interest.

Indeed, in practice, the debtor treats such bondholders as "unimpaired" by the plan with the consequence that such bondholders do not vote and the plan can be confirmed over their objection without meeting requirements for confirmation of plan with a dissenting class of creditors, often called the "absolute priority rule."