How Can Chapter 7 Debtors Learn To Properly Value Their Furniture On Their Bankruptcy Schedules

Florida bankruptcy law permits each debtor to exempt $1,000 of furniture and other personal property including cash. This exemption is small compared to personal property exemptions permitted bankruptcy debtors in other states. Fortunately, your personal property is valued for bankruptcy purposes at garage sale or flea market value. Bankruptcy trustees in the Orlando area are accustomed to seeing very low property valuations, and most will not go after personal property that is valued slightly above the $1,000 per-person exemption limit. Most of my clients understand how to value their belongings at garage sale value. Most do not overvalue their property, and few of my clients have been subject to trustee objections over the exemption of their personal property. Occasionally, I find clients who persistently over-value their property and end up paying money to their Chapter 7 bankruptcy trustee. Once a clients files his property schedules with the bankruptcy court it is difficult for him to amend schedules with lower valuations after a bankruptcy trustee insists on payment or surrender of property.

I cannot tell my bankruptcy clients the valuations of their own property. I do not inspect my clients’ homes or their property, and even if I did, I am not an expert in property valuation. My staff sometimes suggests to clients that their valuations are outside the range of what other clients have submitted in the past, but beyond that advice, we do not suggest what something is worth. I do not want my clients telling their bankruptcy trustees that I, or someone in my office, told them what values to place on their property.

One way to help prospective debtors value property is to suggest they look at property schedules submitted by other people who filed bankruptcy before them. I will not show bankruptcy property lists or values of any of my clients to subsequent clients because of attorney-client privilege. However, all bankruptcy petitions are public record and schedules can be examined using the federal courts’ Pacer computer system. Many of my clients tell me they have used Pacer. Prospective bankruptcy debtors can look at property schedules of any bankruptcy petition previously filed in the Orlando Division, or anywhere in Florida, to see examples of other bankruptcy debtors’ personal property lists and valuations. A debtor should not copy another person’s lists nor their values, but looking a the property schedules of several other debtors can help guide bankruptcy debtors in the valuation of their personal property for bankruptcy purposes and avoid unnecessary payments to trustees because of over-valuation.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida

Comments

[Andrew Evans@bankruptcy]

The bottom line is that you can file for bankruptcy and expect to keep all of your personal property. Make sure you find a good bankruptcy attorney to walk you through the process.

[Christian A. McCue, Esq.]

Ebay has an advanced search feature which allows you to search completed listings only. This has been very helpful in determining values for many items of my clients. For example, one client valued her wristwatch at $1,5000.00. I found several identical watches never having sold for more than $700 on ebay. I don't determine values for clients, but clients may change their valuations after reviewing these completed listings. Some clients have always imagined their stuff being worth more than it is. Ebay's completed sales listings will cure them of that fast.