Best-interests-of-creditors

The best interests of creditors or "liquidation test" is a requirement in reorganization bankruptcy, such as chapter 13, that creditors are not worse of than they would have been in chapter 7. In short, if a debtor's property would have provided money for creditors when sold in chapter 7, the debtor must propose to pay the same amount to creditors over the life of a chapter 13 plan.

Synonyms: 
liquidation test

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