Exemptions are powerful property allowances that permit many debtors to keep most or all of their property in bankruptcy. However, some exemptions are limited in dollar value and cannot completely protect property from bankruptcy. Fortunately, there are options. Chapter 13 bankruptcy allows debtors to keep their property, paying an amount equal to the non-exempt value of their property over up to 5 years. In some cases, the plan will already require a greater payment amount and keeping the property will add no extra cost.
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.