In Chapter 13 cases, the trustee does not take and sell the debtor’s property, but exemptions still play an important role in calculating what the Chapter 13 plan payment will be.  If the debtor has a lot of equity in assets that are not exempt this could dramatically increase the plan payment.  The Bankruptcy Code states that the general unsecured creditors (this includes medical bills and credit cards) are entitled to receive the same amount of money in a Chapter 13 case as they would have received had the debtor filed a Chapter 7 case.  In each Chapter 13 case, the debtor needs to run a hypothetical analysis wherein the debtor figures out how much the general unsecured creditors would get if a Chapter 7 trustee were to sell all of the debtor’s property that is not exempt.  This process is called a “Best Interest of Creditors Test.” This bottom line amount is the minimum amount that the debtor would have to return back to general unsecured creditors.  This test is explained in detail in the next section of this book.


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