Valuing Personal Property in Bankruptcy
Completing forms accurately when filing for bankruptcy requires the assistance of a specialist with a thorough understanding of the legal paperwork and proceedings, especially when it comes to valuing personal property. Our West Palm Beach bankruptcy attorneys have knowledge and experience handling such documents and processes.
It is a requirement when filling out the Schedule A/B bankruptcy forms that personal property be appraised or valued. Before completing this section of the bankruptcy forms, debtors should understand that the current value is the standard measure used in these situations.
The current value of any personal property refers to the fair market value of any cars, furniture, precious jewelry, etc. in the debtor’s possession—excluding real estate. The fair market value can be defined as an item’s price that a seller and buyer agree upon, assuming that there was no external pressure to complete the sale. Typically, the value is the amount that was paid for the item, diminished by the cost of any wear and tear. The current value of the asset is established as of the day that the bankruptcy petition is filled.
Methods Used to Value Motor Vehicles
Trade Publications: Typically, when a vehicle is only a few years old, there is a substantial amount of money still left to be paid off on the loan. Therefore, there is usually little equity in the car, or even negative equity. Regardless of the equity, in order to find the fair market value of the car, those filing for bankruptcy can find the car’s retail value in trade publications such as the Kelley Blue Book and the NADA guides. Mileage, make and model, year, and the vehicle’s condition will be used to determine the vehicle’s value.
Comparable Sale Prices: For cars that are older, the trade publication may not apply or may not have a listing. Alternatively, newspaper advertisements and online websites can give people a better idea of what other people are selling a similar car for. Local used car dealerships can also provide a price point as well.
Appraisals: Another way to get the current value of a vehicle is to obtain an appraisal. Certain car dealerships offer this service; however, sometimes the price they quote is the trade-in value contingent on buying a new vehicle. This type of appraisal represents the amount of money that would need to be paid in order to replace the vehicle. There is also the option of paying for a professional appraiser to assess the fair market value of the vehicle.
Depending on the situation, there is a variety of methods to determine the value of household goods, including furnishing, clothing, and electronics.
Comparable sale prices: Looking around at local stores can provide those filing for bankruptcy with a good price point for what comparable products are selling for. Online sales and auction sites are effective tools as well. The condition and age of the items should be noted and presented to the trustee to clarify what exactly is being valued.
Appraisals: It is possible to get household items such as antiques appraised. Our bankruptcy attorney highly suggests obtaining an appraisal, especially when the owner does not agree with the bankruptcy trustee’s estimated valuation.
Jewelry, Furs, Artwork, and Collectibles
The best way to find out the of value of fine jewelry, furs, artwork and other collectibles would be to get them appraised. It should be specified that the appraisal is for current sale value, not for insurance. Most trustees will reject any appraisals given by pawn shops, as they usually undervalue the property. The best source for appraisals for particularly high-quality items is a reputable dealer in estate property.
If you or someone you know is filing for bankruptcy and needs help valuing personal property, our South Florida bankruptcy attorneys at Kelley, Fulton, & Kaplan have the expertise necessary to help navigate the legal process unique to a debtor’s circumstances. Contact us today to schedule a free consultation.