Lawyer says replacement cost for assets on clothing & furniture?

[momofmany]

The Lawyer we met with on Friday says for writing down our assets, for all the categories we would do a used value, except for clothing & furniture. He says for clothing & furniture, we need to put replacement cost...what it would cost us to go out and buy new to replace what we have...does that make any sense at all??? Honestly, ALL of our furniture was bought at a garge sale, thrift store or gotten for free on the side of the road...same w/ our clothes 95% of our clothing is purchased at garage sales & thrift stores. Why when we never had purchased these items new would we put a replacement cost on them? Plus with 5 kids, the clothing category is really going to add up if we do it that way, rather than the maybe $50/person we could really get if we sold every clothing item we own.

Just curious what your experience in this category has been...

Thanks, Sara

[backtoschool]

You are not supposed to put replacement costs. You are supposed to put what the items would be worth if you sold them on ebay or craig's list or something like that.

Perhaps your actual expenses were too low, and the lawyer was telling you to claim more? Just be honest about what you actually spent. That is always the way to go on these things.

[bkmaggster]

Backtoschool is correct (per usual )

What your lawyer may be confused about is, that when the bankruptcy laws changed in 2005, you were no longer supposed to exempt your things at "wholesale" cost - like what you would sell them for at a garage sale or to a pawn shop. It's supposed to be a "used retail" price, like what it would sell for at salvation army or craigslist or ebay.

The salvation army has a great valuation page. It's been approved by the IRS and many people here have used it for property valuation on their BK petitions.

[momofmany]

Thank you both for answering. I thought he must be wrong, but wanted to be sure. And bkmaggster, thanks much for the Salvation Army chart; that should be very helpful.

Sara

[adviceplease]

This is super, thanks for posting!

The salvation army has a great valuation page. It's been approved by the IRS and many people here have used it for property valuation on their BK petitions.[/QUOTE]

[frogger]

Thanks for the chart!

[shabam]

The lawyer is technically correct, you are supposed to list the replacement cost for buying the equivalent item, in the equivalent condition.

For example: if you have a tv, what would it cost you to purchase the same model and in the same condition (wear & tear). That is the value. Not what you would sell it for.

[aljohnson007]

Believe me, the TT is not interested in your furniture, used TVs, VCRs or other household items unless they have substantial value. One example if you listed sterling silver set worth $3k he would express an interest.

[momofmany]

The lawyer is technically correct, you are supposed to list the replacement cost for buying the equivalent item, in the equivalent condition.

For example: if you have a tv, what would it cost you to purchase the same model and in the same condition (wear & tear). That is the value. Not what you would sell it for.

Shabam, what you said does make sense...the way the lawyer worded it though is we were supposed to list the value as to go buy the item brand new, even though our items are very much not brand new(especially with 5 kids!! ) SO I'm going to go w/ what you guys have said that it is more of a similiar item/condition/used price rather than a brand new price. Maybe that is what the lawyer meant and I just misunderstood him.

Sara

[momofmany]

Believe me, the TT is not interested in your furniture, used TVs, VCRs or other household items unless they have substantial value. One example if you listed sterling silver set worth $3k he would express an interest.

Thanks. I highly doubted anyone would want our junk...If I put what the items are really worth it's probably a couple hundred dollars all together, what I was concerned about is if i put brand new prices, it would look like we really had some assets, when we really don't!!

Sara

[gwar11d2]

I was told "Garage Sale Value" unless it was something really expensive which we don't have... My whole household goods were less than $5000 at garage sale value... Besides, who wants to buy used shoes? icky