How Much Is Your Property Worth? Maybe Not Much, And That’s Good
When is having property that is worth less money better for you? The answer is when you’re filing a bankruptcy. This may seem odd, but in a typical bankruptcy case, the less your property is worth, the better.
Listing Your Property
When you file for bankruptcy, you will have to list all the property that you own. Yes, this can seem like an onerous task. You do need to list everything, but generally the bankruptcy trustee doesn’t care whether you own 12 or 13 pairs of underwear, or exactly how many picture frame screws that you own.
When you list property, you will have to list it with some specificity. Instead of saying you own “a TV,” you will need to say “2018 Samsung 47” smart TV,” and you should be as specific as possible with everything listed.
Remember that not everything listed will need to be turned over to your bankruptcy trustee, but simply because the property is s exempt, or has no value, does not mean you can skip it.
How Can Your Property Be Worth Less?
In most cases, everything you own will fall under an exemption, meaning property that is protected in bankruptcy. In order to fit as much property as possible in an exemption, it is better for your property to be worth as little as possible
You can do this not by being dishonest, but by being very detailed. For example, you can list your laptop. But does your laptop have a cracked screen? Is the USB port not working? These seem like minor details, but they can seriously reduce the value of what you own, meaning that you are more likely to be able to not only keep it, but you will be able to fit more property in your exemptions.
Televisions should be listed in detail, especially because TVs tend to be out of date very quickly. If your TV is from 2018, or if it is missing a feature that today’s TVs have, those problems should be noted.
Does your couch have a small tear, or a stain on it? Is your bed mattress 10 years old? Is the microwave interior stained? When listing property, you should be critical, and think of anything you can, that devalues the worth of your items.
When it comes to cars, think like a dealer would, who would purchase your car. Has it been in an accident? Are there lingering mechanical problems or cosmetic problems with it? All of these can seriously lower the value of a vehicle.
When you list your items, you will be able to list the anticipated value of that item. Your listed value is not definitive—the trustee can challenge those values. But so long as the value is reasonable, the trustee often will not challenge your valuation.