How to Value Personal Property in Bankruptcy

When valuing your personal property in bankruptcy, use the retail replacement value. Here's how.

When completing the bankruptcy forms, you must provide the value of each item of your personal property, such as cars, furniture, jewelry, and the like. You will list these values on Schedule A/B of the bankruptcy forms, as well as a few other forms.

The standard you use in valuing your personal property is the retail replacement value. Read on to learn what retail replacement value means, and the various methods you can use to get this value for each of your personal belongings.  

The Standard: Retail Replacement Value

The bankruptcy laws require that you value your personal property at retail replacement value. This is the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time the value is determined. It is not the cost of replacing your items with new items. The value should represent the amount you would have to pay, on the date you file for bankruptcy, to replace each item with a used item of similar age and in similar condition.  

Different Methods for Different Types of Personal Property

The best method for determining the replacement value for your property will depend on the type of property.

Motor Vehicles

The age and condition of the vehicle may impact how you choose to value a car or truck.

Trade Publications. If the vehicle is only a few years old or there is still a high balance owed on the auto loan leaving little or no equity in the vehicle, looking up the retail value in a trade publication or its online version may be all you need to do. You will need to know the mileage, the particular make and model, the year and the vehicle’s general condition to come up with an accurate value of the vehicle. Some of the online versions also request information on the area of the country where you are located. There are different trade publications and their values may vary. You might want to look at more than one.

Comparable Sale Prices. If you have an older vehicle, the trade publications may be less helpful. You could check the newspaper advertisements or online sites to see what people in your area are selling similar vehicles for or check local used car dealerships to look for prices on comparable vehicles.

Appraisals. You could also have your car appraised. There are some car dealerships that will provide an appraisal but you need to be careful that they are not providing you with a trade-in value that is dependent on your buying a new vehicle from them. The appraisal should represent the amount you would need to pay to replace your vehicle. Another option would be to pay a professional appraiser to assess the value of your vehicle. Your mechanic may be helpful in providing a value but the bankruptcy trustee or the court may be a little suspicious if you receive an appraisal from someone with whom you have had a long time relationship. Information from your mechanic on any necessary repairs or problems with your vehicle may help the appraiser make a more accurate valuation.

To learn more about your options for dealing with your car and auto loan, see Nolo's section on Your Car in Chapter 7 Bankruptcy.

Household Goods

You can use different methods for valuing your household goods, including furnishings, clothing and electronics, depending on what best fits your situation.

Appraisals. Although often unnecessary, you can always use an appraisal to value your household goods, electronics, and clothing. For example, it might be a good idea to get an appraisal of your furnishings if the value of your household goods is disproportionately low when compared to the value of your house (which might happen if a flood damages your furniture, but not your home). A  trustee or the court may be suspicious if you live in a million dollar house and value your personal property at $3,000.  

Comparable Sale Prices. Another way to value your household goods would be to visit various thrift stores, such as Goodwill, or local flea markets, or garage sales to see what comparable goods are selling for. Keep a record of the dates and locations you visit to support your valuation. You can also check online sales or auction sites. Wherever you find your values, make sure to list the age and condition of the property to give the trustee a better idea of what you are valuing.

Jewelry, Furs and Collectibles

Jewelry, furs, and collectibles will almost always need an appraisal. Make clear to the appraiser that you are looking for a current sale value appraisal and not an appraisal for insurance. The valuations may be different. Pawn shops may give you the lowest appraisal value but they have a general reputation for undervaluing property and may not be the best source. A reputable dealer in estate property may be the best source for appraisals on these items.

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