The familiar expression goes "Better the devil you know," meaning it's preferable to deal with the nasty things you don't like but are at least familiar with. General Motors, however, doesn't seem to think so. The troubled automaker appears more ready to take its chances with bankruptcy than continue to fight the weight of monumental debt and the demands of restructuring it.

GM has a $1 billion payment due on June 1, the same day as the government-imposed deadline for having its financial house cleaned up. The company's chief financial officer has just gone on record as saying that GM does not intend to make that payment. The General will attempt another round of debt-for-equity swaps (DFE) with its bondholders, and if it succeeds – and also succeeds in restructuring $20 billion in UAW healthcare obligations – it will get money from the government to continue without bankruptcy. If the DFE doesn't meets its goals, then GM is set to go into government-backed Chapter 11, court protection and what will likely be a nearly clean slate to restart its debt negotiations.

Last week, bondholders said they were preparing a response to GM's most recent offer. The automaker says that it will do what needs to be done "in court or out of court," which means that unless the bondholders' response is "Yes," bankruptcy is a fait accompli.

[Source: Wall Street Journal | Image: Bill Pugliano/Getty]