Valuation in Bankruptcy

Most people don’t spend a lot of time thinking about how much their stuff is worth.  They may remember what they paid for something, but they rarely know what it is really worth.  But, in a Bankruptcy context, value can be key.

In Texas, there is virtually an unlimited homestead exemption in the vast majority of cases.  Recent pay downs, moves and other such factors can affect this but, in most cases, the value of a homestead above the mortgage owed on it is largely immaterial.

But, there are limits on the types, and values, of personal property that can be exempted.  So, knowing the value of property is important in Bankruptcy.  The way the law applies is very strict and straightforward, but the way that the system works is somewhat more amorphous.

Things that you can take to a regular market, stock broker, gun shop, coin collector, antiques dealer and sell them are valued by what that sort of buyer would pay on average.  Cars are valued by Blue Book.  Things that have less apparent markets, like machinery, are also valued by what an actual buyer in the trade would likely give.  But the rest of the “stuff” of life is all valued based on, essentially, garage sale prices.  But, don’t worry, in most cases the Debtor is not required to have a garage sale.  Keeping track of your personal items, an inventory, with purchase dates and prices is a great way to build records in case you need them for bankruptcy and for insurance.

This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.