Bioct?

[Targetonback]

Can someone please tell me what BIOCT means? I cannot find the abbreviation meaning anywhere.

[shipo]

What is the context?

[justbroke]

Can someone please tell me what BIOCT means? I cannot find the abbreviation meaning anywhere.

I'm going to guess that it's related to bankruptcy. If it is, then it is likely an acronym, although I've never ever seen it like this, for the best interest of creditor's test. That test is also known as the Chapter 7 Liquidation test. It is used in a Chapter 13 to determine what the minimum dividend which must be paid to the unsecured creditor pool during the life of a Chapter 13.

It's is usually only a factor when there is non-exempt property in the Chapter 13. It is to guarantee that the Chapter 13 unsecured creditors receive at least as much as they would have in a hypothetical Chapter 7.

Please tell us who is using that awful acronym as it is not used. I have never seen it.

[Targetonback]

It is in my trustee’s docket notes. Specifically, “Reserve the BIOCT in case plan ceases from 100% and claims against third parties in the confirmation order”
Can you explain what makes this quote,”awful?”

[justbroke]

BIOCT is the Best Interest of Creditor's Test which is also known as the Chapter 7 Liquidation Test. The Chapter 13 Trustee is just mentioning that you must pay the value of the BIOCT as the minimum amount in the Chapter 13. Since you are in a 100% plan that is moot. However, if you lost your income or something else happened, the Chapter 13 Trustee must make sure that you still pay the BIOCT regardless of a change in income.

The best interest of creditor's test is to make sure that unsecured creditors receive at least as much as they should have in a Chapter 7. The reason for this entry is to make sure you don't circumvent the Chapter 7 rules in the Chapter 13. Usually, people have a high BIOCT (approaching or even exceeding 100% to all unsecured creditors) because the debtor is keeping non-exempt property, or at least the non-exempt "equity" in the property.

I called it an awful acronym because I have never really seen it before and most people just write "best interest of creditor's test" or "Chapter 7 liquidation test/value". I would never use the acronym because it is not common. In fact, I just searched on Google and there are very few mentions of this acronym.