07 Nov How Much Is Your Property Worth In Bankruptcy?
This is a difficult questions to answer when you are filling out your bankruptcy petition. Just how much is your car, house, jewelry and other personal possessions worth. For some things we can get an appraisal, then we can list the value as the appraised value, this does not mean it would sell for this price. In other cases you cannot get an appraised value so you need to look on Ebay and Craigslist to determine a value.
The other issue to consider is how much it would cost to liquidate your property at auction, and if your property sells at auction it will probably not get appraised or Ebay value, it gets auction value. In my experience most of the personal items people have in bankruptcy are not worth what people think they are worth, given the cost of getting rid of the property. In most bankruptcy cases we have exemptions that cover all of this property. In Minnesota the biggest reason you cannot exempt property is using the Minnesota exemptions for bankruptcy, because our clients have equity in their home.
In bankruptcy you are also walking a fine line, you do not want to undervalue your property and have the bankruptcy trustee object to the value, but you do not want to overvalue your property either, and pay more for the item than is needed. In most cases these issues are worked out informally with the bankruptcy trustee and the personal property in the case is simply settled. If an informal agreement cannot be reached a bankruptcy judge would be forced to value this property.