Preparing to file, non-exempt asset value?

[Chowder]

Just about ready to drop off the financial questionnaire, and a check to the Attorney.

My primary concern is asset equity. The Attorney wants to go federal, rather than state BK so we can use whatever residual homestead exemption as a wild-card to protect a 2004 car that I own outright. There is also a 2007 car, I financed, and some sole-prop biz equipment, both may have some non-exempt value.

But, coming up with an actual value for the house, cars and equipment has proven to be nearly impossible. NADA and KBB are thousands apart on the cars. The equipment re-sellers I've spoken with have given me a "cash" value hovering just over the $5k state 'tools of the trade' exemptions, and well under $20k federal. The house, being the most important number, is either 10k under what I owe, or 30k over.

What's the best way to ascertain these values?

[StartingOver08]

Use an independant appraiser for the vehicle values and equipment values.

Use a Realtor to get a CMA for your house value. Make sure the comps are accurate and have closed within 90 days - not six months. It is better to use an appraiser, but it costs money. The CMA will give you a more accurate idea if the funds are worth spending.

[Chowder]

A buddy of mine is a home appraiser. That's the spread he gave me. This neighborhood is very hard to give hard numbers to.

What does the trustee use to come up with numbers?

[StartingOver08]

Different Trustee's use different valuation models. Most of the valuation models the Trustee's use go to the high side For example, they use tax valuations or automated valuation models like Zillow.

For the vehicles in my district the Trustee uses NADA Retail - which is no where near actual market value. That is why the way you have to prove actual market value is with a third party arms length independant appraiser.

Did your appraisal buddy know you are going to file and give you a valuation based on closed comps within 90 days? Or, did he try to break it to you softly by giving you the huge range? (Sometimes friends can hurt you without knowing it).

Or there may have been no closed comparable sales in your neighborhood the last 90 days and that tells you a lot right there....

[pcn]

So I wonder if that fact that we are rural/small town, with no comps in the recent past helps or hurts us? Our appraiser had to go back to 3/08 just to get 4 comps in our area...most recent was 1/09.

[StartingOver08]

It hurts you to not have recent sales. Going back to Mar 08 is far too long...the market has changed drastically from Mar 08 to Apr 09 - none of the banks/lenders will accept closings from such a long time ago - even with an adjustment for time.

[Chowder]

Did your appraisal buddy know you are going to file and give you a valuation based on closed comps within 90 days? .

He did know. I also told him the target number, which oddly enough is what Zillow values it at. The assessed value is $2k over what we owe.

My Attorney mentioned the Trustee has used Zillow in the past. But there's a catch there too. We added to the house towards the end of last year for the MIL. Zillow still lists old sq. footage etc.

[pcn]

It hurts you to not have recent sales. Going back to Mar 08 is far too long...the market has changed drastically from Mar 08 to Apr 09 - none of the banks/lenders will accept closings from such a long time ago - even with an adjustment for time.

So how will the bank challenge it, if there are no comps to challenge it with? Zillow doesn't even recognize our area. The older comps could only raise the value over what it currently is, and we come in 6k below what we need for our lien strip.

[StartingOver08]

You can lien strip in a 13, not in a 7.

If the older values help you in your 13 - then by all means, go for it.