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Topics:

Keywords: Chapter 13 . Liquidation Test . Best interest of creditors test .

Topic #75:: Chapter 13: "Liquidation test" / "best interest of the creditors test" of 1325 (a)(4) -- issues, timing, computation, deductions

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  • 4 Cases on This Topic
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Chapter 13 > Procedure

Chapter 13: "Liquidation test" / "best interest of the creditors test" of 1325 (a)(4) -- issues, timing, computation, deductions

4 Cases , IssueID 75

Topic Description:

The "best interest of creditors test" of § 1325(a)(4) -- also informally known as "the liquidation test" -- requires that unsecured creditors in a Chapter 13 case be paid at least as much through confirmation of a proposed Chapter 13 plan as they would receive if the debtor's case were liquidated under Chapter 7 of the Bankruptcy Code.
It is important to remember that number is not arrived at simply by adding up the value of the property; you are also allowed to reduce that amount by the administrative costs of selling the item, etc. to arrive at the true amount that unsecured creditors would get in a Chapter 7 case.

Lines of Cases:

A:

Liquidation analysis starts with value of assets then substracts admin and other costs of sale

B::

Test must be applied under 1329 whenever a plan modification is proposed

Topic Background / Overview:

  • Type A = Liquidation analysis starts with value of assets then substracts admin and other costs of sale
  • Type B = Test must be applied under 1329 whenever a plan modification is proposed
  • Type E = "Everything Else"
  • Cases for Zip
  • All Cases By Date
  • Cases A - Z

Cases for Zip , California Northern District Bankruptcy Court

Ninth Circuit Cases

No Ninth Circuit cases in database on this topic

Other Circuits

� IN RE WALKER

Bankr. CD Illinois - 07-70358 - 2010-10-21 - 13 ,

Google ID#: 8082278774652865846
(Type A : Liquidation analysis starts with value of assets then substracts admin and other costs of sale )

� In re Auernheimer

Bankr. D. Kan. - 437 B.R. 405 - 2010-09-08 - 13 ,

Google ID#: 11610597635915154121
(Type : )

Effecive date of modified plan, for purposes of property valuation, is the date of modification, not the date of the original plan. Debtors modified plan to reflect what creditors might hope to recover in a Chapter 7 liquidation, as of the date of modification.

� IN RE SHAW

Bankr. ND West Virginia - Case No. 09-219 - 2010-01-11 - ,

Google ID#: 17644368378186845094
(Type A : Liquidation analysis starts with value of assets then substracts admin and other costs of sale )

� In re Sharp

Bankr. C.D. Ill. - 394 B.R. 207; 213 - 2008-08-21 - 13 ,

Google ID#: 1061342756792521854
(Type A : Liquidation analysis starts with value of assets then substracts admin and other costs of sale )

� IN RE WALKER

Bankr. CD Illinois - 07-70358 - 2010-10-21 - 13 ,

Google ID#: 8082278774652865846
(Type A : Liquidation analysis starts with value of assets then substracts admin and other costs of sale )

� In re Auernheimer

Bankr. D. Kan. - 437 B.R. 405 - 2010-09-08 - 13 ,

Google ID#: 11610597635915154121
(Type : )

Effecive date of modified plan, for purposes of property valuation, is the date of modification, not the date of the original plan. Debtors modified plan to reflect what creditors might hope to recover in a Chapter 7 liquidation, as of the date of modification.

� IN RE SHAW

Bankr. ND West Virginia - Case No. 09-219 - 2010-01-11 - ,

Google ID#: 17644368378186845094
(Type A : Liquidation analysis starts with value of assets then substracts admin and other costs of sale )

� In re Sharp

Bankr. C.D. Ill. - 394 B.R. 207; 213 - 2008-08-21 - 13 ,

Google ID#: 1061342756792521854
(Type A : Liquidation analysis starts with value of assets then substracts admin and other costs of sale )

All Cases A to Z

  • In re Auernheimer, 437 B.R. 405 , (Bankr. D. Kan. ) 2010-09-08, #11610597635915154121
  • In re Sharp, 394 B.R. 207; 213 , (Bankr. C.D. Ill. ) 2008-08-21, #1061342756792521854
  • IN RE SHAW, Case No. 09-219 , (Bankr. ND West Virginia ) 2010-01-11, #17644368378186845094
  • IN RE WALKER, 07-70358 , (Bankr. CD Illinois ) 2010-10-21, #8082278774652865846

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When you read a case, check to make sure that the case's decision applies to your local district. Do this by looking at which court has decided the case -- either the U.S. Supreme Court, a court of appeal (listed here in large type), or a district court (listed in small type).  Your local district court judge is not bound to follow the opinion of judges from other district courts, but often they look to these cases for advice. Your local district, however, is bound  to follow decisions in cases from it governing circuit court. You'll see fairly few Supreme Court case here, but those cases are also binding on all districts."

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This database does not contain every relevant case in every district on the topics covered; there are high priced services for that. This is free. It is offered to the public "as is" as an adjunct to the Nolo books, How to File Chapter 7 Bankruptcy, and Chapter 13 Bankruptcy: Keep Your Property and Repay Your Debts Over Time (10th Edition, 2010): which I co-author with attorney Stephen Elias.

This database is updated as time permits. Do not assume that it has the latest case in your district. We are still filling holes in the database -- and will always be. Use it as a place to start your reasearch, rather than the final answer to your question.

Some of these issues involve the discretion of the judge which can vary from judge to judge. So, even if you find a case just like yours where a judge went your way, as they say in the car biz, "your mileage may vary..."

If you're not familiar with what "case law" is, and how to use it, check out Chapter 7 of Nolo's LegalResearch: How to Find and Understand the Law for a guide to how to read through a case to get the parts that matter.

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