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David C. Hoskins, Attorney at Law


Discusses what happens to property in Chapter 7 and Chapter 13 bankruptcy.

How Do I Value My Property?

Posted by DaveHoskins on May 30, 2014


The value of your property is very important in bankruptcy. When you file your bankruptcy petition, you will also file schedules of property, in which you will list everything you own. You will also declare the value of your property. The value of your property is important, as most property can be protected, but only up to a certain value.

For example, everyone may claim an exemption for a personal automobile with a value up to $7,500 ($12,500, if elderly or disabled). If you have a car with a trade-in value of $11,000 and you owe $6,500 on the car loan, the car has equity of $4,500. If the trustee in a chapter 7 bankruptcy took the car and sold it, he would get net proceeds of $4,500 (less costs of sale). But, if you had properly claimed your $7,500 exemption in that car, the trustee would get nothing, as that $4,500 would have been protected.

Your task in preparing your bankruptcy is to determine the value of your property. Here are some guidelines for valuing property in bankruptcy.

Valuation of Real Property.

The value of real property (e.g. your home) is commonly referred to as the fair market value. The best source for the value of real property is current market data. Real estate agents will often estimate the price your property would sell for, based upon recent sales of comparable properties. There are websites that approximate the value of your property, such as Zillow.com, that are based upon data at your county assessor’s office and other public data bases. Or, you could hire a real estate agent to do a formal current market analysis (CMA) or hire a licensed appraiser to do a more comprehensive, formal appraisal.  Call me for a referral to a reliable real estate agent who will do a professional CMA for a reasonable fee.

Valuation of Personal Property.

The value of tangible personal property (for example: vehicles, household goods, sporting goods), for purposes of bankruptcy, is the “liquidation value.” Liquidation value is not the purchase price of an item, nor is it the replacement cost, nor is it the price you could get if you advertised it in the newspaper, Craigslist.com, or on Ebay.com. Typically, the liquidation value is what you could get if you sold the item at a garage sale, at an auction, or to a pawn broker. For example, if you paid $300.00 for a couch, it might now cost $400.00 to replace it new, but you might only get $25.00 for it at a garage sale or at an auction.  The value of intangible personal property (stock, copyrights, trademarks, patents) will be determined by the market:  what would an interested buyer be willing to pay for it?  Most people tend to exaggerate the value of their personal property. Here are some guidelines for various categories of property:

  • Household Goods: To be realistic, most household goods (furniture, appliances, clothing, books, etc) can be purchased at a garage sale for 10% of its cost.
  • Sporting Goods, Guns, Jewelry: Whatever a retailer or pawnbroker (a store that buys and sells used goods) would pay you for it, in cash; it’s often worthwhile to take the item in and ask what they’d pay you for it (Don’t ask what it’s worth – ask how much they would give you for it, in cash).  However, if you have valuable jewelry or collectibles, I recommend that you take the item to the auctioneer that our trustees use, Dickensheet & Associates, 1501 W. Wesley Ave., Denver, CO 80223 (303-934-8322).  They'll charge a fee, but it will be well worth the cost to know what the value is and have proof that the trustee will accept.
  • Life Insurance
  • Term Life Insurance – These are policies that are issued for a limited number of years and have no cash value accumulating. They are valued at zero ($0), as you can’t sell them or cash them in.
  • Permanent Life Insurance – This includes any policy that is accumulating a cash value (whole life, variable life, etc). These policies are valued at the cash surrender value; that is, if you surrendered the policy to the insurance company, how much would you receive in return? The trustee can do whatever you can do with your property; if the policy can be surrendered for $5,000, that is its value.
  • Educational IRA: The value is equal to the amount you have contributed, plus any accrued interest.
  • IRAs, 401Ks, 457 Plans, TSPs (Taxpayer Savings Plans): The value is equal to the balance in the account.
  • Pension Plans: If your pension is a defined benefit plan, the value will depend upon your age and life expectancy. Usually, the value of a pension will be declared as “unknown” for purposes of bankruptcy.
  • Stock, Interests in Businesses: The value of your interest in a company is whatever a willing buyer would pay you for it. For publicly traded stock, the stock market reports will provide current sales data. For privately held companies, the value will be whatever the other owners of the business will pay you for it. For your own, wholly owned company, the value is most likely the liquidation value of assets, less debt; in other words, if you closed your doors, today, sold all the assets and paid all the debts of the business, what’s left over? That’s its value.
  • Accounts Receivable: How much does some other person owe you? That’s its value, if it is collectible without incurring the expense of collection action. If collection of the debt will require legal action, the value of the receivable may be reduced by the expected costs of collection.
  • Automobiles: Generally, liquidation value of vehicles will be the trade-in value. For late model personal vehicles, there are some useful on-line resources: www.nadaguides.com; www.kbb.com; www.edmunds.com. For vehicles that are older or difficult to value, I recommend that you take the it to the auctioneer that our trustees use, Dickensheet & Associates, 1501 W. Wesley Ave., Denver, CO 80223 (303-934-8322).  They'll charge a fee, but it will be well worth the cost to know what the value is and have proof that the trustee will accept.


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The statements of law made here are general statements of law, effective at the time published and subject to change from time to time. These statements are not intended, nor may they be construed, to be applicable to any particular set of factual circumstances nor to any particular person. I recommend that all readers seek the assistance and advice of an experienced bankruptcy lawyer for guidance in their particular circumstances.

© Copyright 2013 David C. Hoskins, licensed Colorado lawyer