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Make Sure Your The Value Of Your Automobile On Your Bankruptcy Petition Reflects The Depressed Used Car Market
Bankruptcy trustees have in the past determined the value of a debtor’s car by using the average of the wholesale and retail value in the NADA car book (the yellow book). In the past few months car values have plummeted because of the credit problems in the economy and the overall recession. The NADA book has not kept pace with the decline in car values. This week I discovered that some bankruptcy trustees in our division are encouraging debtors to get trade-in appraisals from national car companies such as Carmax. The Trustees are accepting these appraisals in lieu of the NADA values.
For example, one of my clients filed a bankruptcy petition on which he valued a used car at $3,000. There was no lien on the car. The car had, therefore, $2,000 of non-exempt equity. At the creditors meeting the Trustee encouraged the debtor to get a current appraisal. The next day the debtor obtained from Carmax an appraisal of $500 for the same car. Bankruptcy debtors should get market appraisals for their cars before filling out bankruptcy petitions. Your bankruptcy attorney is not a car valuation expert, and he is unlikely to change your valuation of your vehicle. The market for used cars is almost as depressed as the real estate market. Debtors should insist that their vehicle equity is based on current market values rather than slow-changing valuations in used car price books.
posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida
November 12, 2008 in Chapter 7 | Permalink
Comments
I have been reading several blogs to get some advice on our situation.
My husband filed for bankruptcy last year and it is a chapter 13 case. We have some vehicle assets and when we went to attorney interview he explained that since the title of 2 of the vehicles were held in both names the asset would be 50%. Which was fine, until he had filed the petition he made him claim 100% of the vehicle values which is wrong and we have asked that he amend this petition several times and he will not budge and said that he had to claim them. But unfortunately I had to file a bankruptcy case this year. (this is our second marriage and all of our debts were seperate)He got laid off so that is what I had to do. Anyway had my 341 meeting last week with the trustee and the first thing out of his mouth was how are the vehicles titled and I explained it said my husbands names first and then it read "OR" my name so he said then you claim 50% of asset value. Why was this not done on my husbands chapter 13? And why wont his attorney amend the petition/ We are at the point we are going to ask that it be dismissed because the payment is almost $600. a month because of the assets that were claimed and one of the vehicles which is a saturn is our daughters car she's just not old enought to have a car in her name. What can we do. We have to figure out how to pay the trustee and now a new orthodontist bill of $150. amonth. We have made 7 trustee payment so far and his attorney got angry when we contacted the trustee directly but that was what the paper explained us to do if there were problems. I have emails where his office said they would take care of these amounts before the petition was filed. Please help.
Posted by: Shar | Jun 12, 2009 12:14:38 PM
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Susan
http://www.car-insurance-choices.com
Posted by: Susan | Nov 13, 2008 12:12:45 AM
