Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I buy a home after bankruptcy?”
Those who are filing for either Chapter 12 or, far more commonly, Chapter 13 bankruptcy protection, should familiarize themselves with the phrase “best interest of creditors.” To find out more about what this refers to and how it can impact your bankruptcy case, keep reading.
The law says that the best interest of creditors test is applied in Chapter 11, Chapter 12 and Chapter 13. That means the test is not applied in Chapter 7 or other liquidation bankruptcy cases.
What is the best interest of creditors test?
The test, which is also known as the liquidation test, says that unsecured creditors involved in a Chapter 13 case must be paid at least as much money under a potential repayment plan as they would have received if the debtor’s case were liquidated under a Chapter 7 plan.