Fair Market Value??

[pigpen75]

I owe about $13k for my truck and it Kelly blue books at around $7k. I'm thinking of redeeming it and I'm trying to figure how they would decide what fair market value on the truck is? It also has some hail damage

[StillSwingn]

I just met with my attorney this morning for the first time and asked about a car we are paying on. He said the trustee will use Kelly Blue Book for its value when determining any equity....which seems like a bogus deal since Kelly is way out of line these days. He said to use private party sale as your category for value.
In your case maybe you could provide an appraisal since it has damage.
If your upside down why not just give it back to the bank? I know, you may not be able to swing another loan right now or have cash to buy a car outright but....

[IBroke]

Unfortunately - based on what I read from various sources - there is no straight answer to that question. Some Trustees might use NADA, others use KBB and in addition to that, it's not even clear what KBB they use.

However, in my district (Florida Middle District), there are some Trustees who go a different route:
They recognize the fact that the true value of a car is NOT what KBB or NADA says. Depreciation is crazy on cars right now and both "books" are not up to date.

I will get an appraisal from Carmax. This is a third party appraisal and much more accurate and up to date than KBB since it takes the REAL car into consideration rather than something that only exists in theory. Since I want to redeem the car, a lower price does make a difference.

And the most important thing is that many trustees in my district accept Carmax appraisals.

[IBroke]

Unfortunately - based on what I read from various sources - there is no straight answer to that question. Some Trustees might use NADA, others use KBB and in addition to that, it's not even clear what KBB they use.

However, in my district (Florida Middle District), there are some Trustees who go a different route:
They recognize the fact that the true value of a car is NOT what KBB or NADA says. Depreciation is crazy on cars right now and both "books" are not up to date.

I will get an appraisal from Carmax. This is a third party appraisal and much more accurate and up to date than KBB since it takes the REAL car into consideration rather than something that only exists in theory. Since I want to redeem the car, a lower price does make a difference.

And the most important thing is that many trustees in my district accept Carmax appraisals.

This information I provided seems to be wrong..

according to the attorney i visited today, they only accept certified NADA appraisals - in my case, that would be $4,600 instead of $2,000.

There goes my redemption..Oh well, I'll save that money for a different car.

[IBroke]

Well, let's see if MY attorney was right - I contacted the attorney from Orlando. Let's see...

[StartingOver08]

Carmax valuations are accepted by some Trustees.

IBroke, I thought you were the one that originally posted about the Orlando attorney that said some of the Trustees in the Middle District of Fl are now accepting the 'Carmax value' as it represents the actual value rather than the NADA value previously accepted...

As posted by that Orlando attorney:
.

http://www.bankruptcyorlando.com/2008/11/make-sure-your-the-value-of-your-automobile-on-your-bankruptcy-petition-reflects-the-depressed-market-of-used-cars.html

Maybe the BK attorney you went to yesterday is not as up to date as the Orlando attorney! Good luck with your new consult....

[IBroke]

Yes, StartingOver08, that was me - and that's why I felt obligated to mention my concern.

The lady I visited said carmax is a "no-no" - but the attorney from Orlando said it's OK. NOW the attorney from Orlando is in a different DIVISION (Orlando) than I am (Tampa), but I'm not sure if that is important. After all, it's the same district-court. Once again, here is the complete post of that attorney. He doesn't mention "redemption" but I wouldn't see a reason why that matters. Now what I put in bold should also apply to the determination of the redemption-value - and if the trustee accepts carmax to evaluate an exemption-asset, why not for the redemption, too?

"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."

The attorney is not in the office this week and will be back on Manday, March 2nd. As soon as I get a reply, I'll let you know.

EDIT: Anyway, I will list the carmax-number as value and redemption-price on my BK-documents. If the trustee accepts, I'll redeem. If they want the sky-high NADA-price, I won't (and can't) redeem.

[StartingOver08]

Well, I don't know how this division thing works. But, we are having so many BK's in our area (Southern District of Fl) - that the Trustees in Palm Beach County now have the Trustee's from Broward County (the next county south of us) actually coming up here to help out!

So, ask your Orlando attorney if you are allowed to use that division rather than Tampa. Maybe that would help your car situation. IDK