Determining Property Values in Bankruptcy
Everyone who files bankruptcy must disclose all of their real and personal property. The value of real estate can be easily done with an appraisal or market analysis. For cars, debtors can look at the blue book value. The biggest problems with valuation arises when debtors attempt to determine a value for other personal property such as clothing, household goods and furnishings.
When determining value, it’s important to think carefully about what you actually own. You must consider the age and condition of the property. Although jewelry, antiques and collectibles often increase in value, most property items decrease in value. Therefore, old clothes, furniture and appliances will usually be worth less than the original purchase price.
Generally, property is worth what someone else is willing to pay for it. If you’re completely unsure about what you should list as the value of certain property, it can be helpful to browse web sites that feature used items for sale such as eBay and Craigslist. Ultimately, the value that you list will be an educated guess because there is no way to know for sure how much someone is willing to pay for something unless you actually attempt to sell it.
Some of my clients have inquired about whether the bankruptcy trustee would show up at their homes to look at their personal belongings. I have not seen it happen, but it can happen if the trustee has a reason to believe that the debtor owns more than what is listed on the bankruptcy schedules.