Bankruptcy by Keyword:

"Best Interest Of Creditors Test"

Related Keywords: Chapter 13 plan . Chapter 13 Plan Modification . exemptions . Liquidation Test .

Case Law Topics

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

    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.