How to Assess the Worth of Personal Assets during Bankruptcy
Thinking of filing bankruptcy? Are you looking into how to value personal property in bankruptcy? Personal property is a vital component of a person’s financial situation and plays a significant role in bankruptcy procedures. Understanding how personal property is treated in bankruptcy is essential for navigating the complex landscape and achieving financial stability.
If you need help understanding Arizona bankruptcy exemptions, get in touch with our Phoenix bankruptcy attorneys. We represent and advocate for our clients, ensuring debtors’ rights are upheld, benefits are maximized, and your personal property is handled properly during bankruptcy.
What Happens to Personal Property in Chapter 7?
Assets must be liquidated in a Chapter 7 bankruptcy in order to pay creditors. Not all personal property, though, is up for liquidation. State and federal regulations define exempt property as being exempt from selling to settle debts. Clothing that is necessary, household items, a specific amount of equity in a home or car, and instruments of the trade are typical examples of exempt property.
Valuation Process in Chapter 7
The fair market value of non-exempt personal property is typically used to determine its value. The price at which the asset would sell on the open market is its fair market value. To determine this value, the bankruptcy trustee may use a variety of techniques, such as appraisals, estimations, or online valuation tools. The trustee is responsible for maximizing the value of the bankruptcy estate for the benefit of the creditors.
Liquidation and Exemptions in Chapter 7
The bankruptcy trustee in Chapter 7 may sell your non-exempt property to pay off your creditors if its value exceeds the permitted exemption limits. According to their priority and the bankruptcy regulations, the proceeds from the sale are divided among the creditors.
What Happens to Personal Property in Chapter 13?
A Chapter 13 repayment plan is made to pay back creditors over a predetermined time frame, typically three to five years. Contrary to Chapter 7, Chapter 13 does not provide for the sale of personal belongings. Instead, while defining the repayment schedule, the worth of your personal property is taken into account.
Valuation Process in Chapter 13
In Chapter 13 cases, the value of personal property is frequently considered when determining the disposable income available for the repayment plan. Similarly to Chapter 7, the value is based on fair market value. However, because you are not required to sell the property, the valuation process may be less important. Instead, the value is used to calculate how much you must repay to creditors under the Chapter 13 plan.
Liquidation and Exemptions in Chapter 13
You can keep your exempt property if you file for Chapter 13 bankruptcy protection. The monthly repayment amount for your Chapter 13 plan is determined by taking into account the value of your non-exempt property, your income, your expenses, and other financial considerations.
Our Phoenix Chapter 13 bankruptcy lawyers are well-versed in legal processes, assuring fair valuation of personal property across chapters, negotiating regulations and exclusions, and ensuring proper classification. Contact Phoenix Frest Start Bankruptcy Attorneys to consult with a lawyer today.
How to Calculate Personal Property Value in Bankruptcy
If you’re planning to file bankruptcy in Arizona, it’s important to have a good understanding of how the bankruptcy court values your assets and property. Calculating personal property value requires a methodical approach that takes market trends into consideration. An experienced Phoenix bankruptcy attorney can help you calculate the worth of your assets so you can choose the best type of bankruptcy for you.
Here are three of the most common assets and property involved in bankruptcy filings:
Vehicles
Trade publications: Looking up the retail value in a trade newspaper or its online form may be all you need to do if the automobile is only a few years old or the auto loan balance is still very high, leaving little to no equity in the car. The Kelley Blue Book and NADA guides are the two that are most frequently utilized. Be ready with the vehicle’s general condition, the year, the specific make and model, and the mileage. Some of the online versions additionally ask for details about the region of the nation you are in.
Comparable sale prices: The trade periodicals might not be as helpful if your car is older. To find out who is selling similar automobiles in your region, you could look through newspaper classifieds or internet listings. Additionally, you can search for comparable vehicle costs by visiting nearby used car dealerships.
Appraisals: Get a thorough appraisal for your car. While some dealerships could offer appraisals, be wary of trade-in values that are linked to purchasing from them. The value of your car should be reflected in the appraisal. Although you should be wary of a long-term connection, you can consult your mechanic or employ appraisers to determine the worth. The appraiser’s evaluation of repairs can be aided by your mechanic’s advice.
Household Goods
Comparable sale prices: Visit several thrift stores, such as Goodwill, or your neighborhood flea markets and garage sales to discover what comparable items are going for in order to determine a fair value for your home stuff. Keep track of the times and places you visit so you can back up your assessment. Additionally, you might look at online auction or sale sites. Wherever you get your values, be sure to include the property’s age and condition to help the trustee understand what you are evaluating.
Appraisals: You can always employ an assessment for any household object that has special value, such as any antiques you may own, even though it is frequently unnecessary. Remember that until the bankruptcy trustee assigned to your case assigns a value that you disagree with, you probably won’t need to incur the expense.
Furs, Artwork, Jewelry, and Collectibles
These kinds of goods might require an evaluation. Make it clear to the appraiser that you need a current sale value appraisal, not an insurance value appraisal. The assessments could differ. The trustee may object to the appraisal even if pawn shops may give you the lowest appraisal value because they have a reputation for undervaluing goods. For appraisals on these goods, a respected estate property dealer may be your best bet.
Call our Phoenix Bankruptcy Attorneys Now!
Personal property is an important part of an Arizona bankruptcy case. The value of these items can vary quite a bit and be affected by a number of factors. Before taking an asset you own in a bankruptcy case, you should have a good understanding of how to value personal property in Chapter 7 and Chapter 13 bankruptcy.
Our Phoenix bankruptcy lawyers are well-versed in Arizona bankruptcy laws and can help you file for Chapter 7 or Chapter 13 bankruptcy so you can keep the assets that you need. Phoenix Fresh Start Bankruptcy Attorneys offers a free, no-obligation, stress-free financial analysis. We also offer legal guidance and representation for involuntary bankruptcy as well as divorce & bankruptcy concerns.
