How to Estimate Personal Property for Bankruptcy
When filing for Chapter 7 or Chapter 13 bankruptcy, a debtor needs to determine the value of their property. In Chapter 7, the bankruptcy trustee can take a debtor’s nonexempt property and sell it in order to pay creditors. In Chapter 13, a debtor can keep exempt and nonexempt property but must repay unsecured creditors an amount equal to the value of the nonexempt property.
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Things You'll Need
- • Inventory of property
- • State or federal exemption list
- • Kelley Blue Book
Instructions
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1
Inventory the property you own. List of all the property included in your bankruptcy estate. This does not include property stored for another person, employer contributions to an employee health insurance plan, and some pension plans.
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2
Choose the exemption system you will use. Every state has a list of exempt property. A few states allow the filer to use the federal list instead of state exemptions. In California, the filer can choose between System 1 and System 2.
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3
Determine the replacement value of the property. Consult with sources such as Kelley Blue Book or eBay.
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Evaluate whether the property you own is exempt. Some exemptions allow a debtor to keep the property regardless of its value, while other types allow the filer to exempt the property up to a certain dollar amount. Common exemptions include clothing, home furnishings, wedding rings, tools of the trade for a business, and equity in a vehicle or home up to a certain amount.
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Determine the exemption amount allowed by your state or the federal system. Record the number of the statute.
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Evaluate which property is not exempt. The bankruptcy trustee can take a debtor’s nonexempt property and sell it in a Chapter 7 bankruptcy. Nonexempt property includes cash, business assets, coin collections, equity in a vehicle, antiques, and expensive jewelry.
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Determine whether it is possible to use a “wildcard” exemption to save property not eligible for an exemption or to save property that exceeds the exemption amount. Many states allow a filer to use a wildcard exemption, which usually ranges from a few hundred dollars to a few thousand dollars, for any type property.
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References
- Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time; Stephen Elias & Robin Leonard; 2008
- How to File for Chapter 7 Bankruptcy; Stephen Elias, Albin Renauer & Robin Leonard; 2007
