When it comes to bankruptcy proceedings, the total amount that you owe is not the only figure that matters. Regardless of if you file Chapter 7 or 13, the value of your personal property can play a role in the proceedings, as well. In Chapter 7, assets that are worth more than your exemptions can be liquidated to pay back creditors. In Chapter 13 bankruptcy, on the other hand, the total value of your nonexempt assets is also the minimum amount you must pay back unsecured creditors. Here is what you should know about calculating these figures.
The Value of Motor Vehicles
Valuing a motor vehicle for bankruptcy purposes is virtually no different from determining a fair market value to sell it. You can reference the Kelley Blue Book, for example, or the prices for comparable vehicles at used car dealerships. A professional appraisal can also provide a set figure that should equal the amount you would need to pay to replace the vehicle.
The Value of Unique Property
Unique property includes items like fur, jewelry, artwork, collections, and family heirlooms. Typically, the best way to value this property is by taking it to a professional appraiser. Just make sure to tell the appraiser you are looking for the current retail value—not the recommended insurance coverage—because such valuables can vary.
The Value of Household Goods
Household goods include furniture, appliances, electronics, and clothing. These items tend to depreciate rapidly, which makes it challenging to determine a fair market value for them. Browsing flea markets, garage sales, thrift stores, and classified ads can all provide some insight into the cost of replacing comparable goods.
If you’re thinking about declaring bankruptcy in Alabama, turn to The Gil Law Firm. Based in Dothan, this practice has been representing clients throughout Dale, Henry, and Houston counties since 2000. With a commitment to protecting those who find themselves in dire financial straits, their areas of expertise include bankruptcy, Social Security, and personal injury law. To learn more about their bankruptcy services, visit their website. You can schedule an initial consultation by calling (334) 673-0100.