0:04
in a
0:06
reorganization creditors are paid back
0:09
according to two tests one is the
0:11
liquidation test and one is the income
0:14
test the liquidation test is what are
0:17
the assets of the company that are not
0:20
encumbered or what are the assets of the
0:23
individual that are not exempt not
0:27
protected under some sort of state law
0:30
or federal law whatever the value of
0:32
those assets are that amount has to be
0:35
paid to the unsecured creditors over
0:38
time that’s test number one test number
0:42
two is the income test in some cases the
0:44
disposable income which means whatever
0:47
income is left over after all expenses
0:49
are paid has to be paid to creditors
0:52
unsecured creditors that could be over a
0:55
three-year period or a 5year period
0:57
depending on the case so there are
1:01
definite certain requirements and
1:03
changes for different types of cases but
1:06
for the most part it’s the income test
1:09
and the liquidation test