Replacement Value - What Does it Mean??

[ApresMoi]

Here's an example. If an antique is put out in a yard sale, I MIGHT get $1,000 for it. If I sold it at an auction house, I might get $1,700 (after they take their commission). Let's say a formal appraisal would value the item at $4K (have no idea). Further, if I had to walk into a ritzy antique store and buy it, I might have to pay $5K for it. Why? Because ritzy antique shop owners are insane, that's why.

So WHAT is this item's value for purposes of a Ch. 7?.

[StartingOver08]

What garage sales are you attending?????
For BK purposes Antique = Old, which means cheap. Don't over value your stuff.

[ApresMoi]

And do BK trustees automatically become interested in any one item valued at more than a few thousand (e.g., require formal appraisals)? I have been told that appraisers will come in at the very high end of valuations, whereas auction houses give you 'fair market value' -- what the item will actually sell for, not it's 'theoretical value'.

Why do appraisers do this anyway (value so high). What's their motive for doing so? Who benefits from that? Just curious.

[ApresMoi]

What garage sales are you attending?????
For BK purposes Antique = Old, which means cheap. Don't over value your stuff.

No, it's an actual antique that has value. Over 100 years old. I can't lie about value, but there appears to be a WIDE range of valuation options.

[flyinbroke]

One lawyer (have not met with him yet, but website is very thorough) had his pre BK papers on there. He said that when you value your items, make them garage sale prices, and guides further to say no more than 10 cents on the dollar. They want to know how much they can make on fire sale prices. In this market nothing will command top value.

Appraisals are for insurance purposes only and are usually replacement value if you have full replacement insurance.

[backtoschool]

You should value your stuff at what you could get for it on ebay or craigslist, etc if you had to sell it right away. Garage sale prices are probably a bit too low for an antique, but you would not get top dollar if you had to sell it right away, and neither would the trustee. Basically, an antique is used furniture in terms of bankruptcy schedules.

Value it as an ebay bargain.

[OhioFiler]

I hope you're not itemizing your possessions in some detailed manner. That is overkill.

Besides, unless those PI's outside have really powerful binoculars I doubt they'll be able to appraise your stuff accurately.

[ApresMoi]

I hope you're not itemizing your possessions in some detailed manner. That is overkill.

Besides, unless those PI's outside have really powerful binoculars I doubt they'll be able to appraise your stuff accurately.

These posts are very helpful. Thank you all. No, I will not provide detail, but I appreciate the reminder.

Binocs or no binocs, no one can see in here. I'm on an upper level, etc.

[JEM]

I have a question about "garage sale" values....

The second lawyer I saw said that trustees don't like it to be "garage sale" value, that it's replacement value for LIKE CONDITION/AGE. Which the lawyer admitted is basically garage sale value. Because honestly, where are you going to get a 7 yr old couch or a 2 yr old TV etc...

So is he basically saying that yes, you should value your stuff as a 2 yr old TV or a 7 yr old couch?

That was my understanding.

[ApresMoi]

I have a question about "garage sale" values....

The second lawyer I saw said that trustees don't like it to be "garage sale" value, that it's replacement value for LIKE CONDITION/AGE. Which the lawyer admitted is basically garage sale value. Because honestly, where are you going to get a 7 yr old couch or a 2 yr old TV etc...

So is he basically saying that yes, you should value your stuff as a 2 yr old TV or a 7 yr old couch?

That was my understanding.

Just go on ebay or craigslist and search for your item. A 7 year old couch, even if expensive when new, is essentially worthless today. If it cost 3,500 new, and is still in mint condition, you MIGHT get $300 at auction. As it was told to me, people don't want to buy old couches or bedding. Go on eBay. You can find once pricey used mattresses selling for next to nothing. I saw a huge King size Sealy that was something like 2 years old, was clean and looked brand new (and was being sold from a very nice neighborhood/home), and they couldn't get any bidders at $200.

Just check online to find comparable sales and use that to value things. The trustee isn't going to have any easier time selling it than you will.

For what it's worth, one auction house told me they only hold auctions to sell furniture twice per year in Los Angeles. So what is a trustee going to do? Pay to store your goods before they can sell them in six months at auction? I don't think so.

[flyinbroke]

One lawyer I looked at had on his website the preliminary paperwork. He said flat out "garage sale prices" and he wanted to see no more than ten cents on the dollar. That sounds about right for furniture and even electronics. My 10 year old couch was 800, and may get 80 tops. If I clean the dog hair off it.

[JEM]

One lawyer I looked at had on his website the preliminary paperwork. He said flat out "garage sale prices" and he wanted to see no more than ten cents on the dollar. That sounds about right for furniture and even electronics. My 10 year old couch was 800, and may get 80 tops. If I clean the dog hair off it.

Ha! I asked my husband what he thought we'd get at a garage sale for our couch and loveseat and he said MAYBE $50...for the PAIR. I said we'd probably end up having to haul it off to goodwill as a donation.

We bought them 7 yrs ago at the PX for like $1000....it's been moved 3 times since then, and through 2 small kids and one teenager in the that time. And now a puppy that likes to chew on the bottom.

[flyinbroke]

Mine has pug hair and cat puke spots on it and has done a couple of cross country moves. 80 is only ten cents on the dollar and I may get that for the couch and loveseat, being as they are currently, ahem, decorated. I was going to get new furniture, looked in the BX catalog...may just opt to clean what I have for the BK time being lol. Besides, who wants new stuff being decorated by pugs and kittehs.

The only expensive thing I have is my new mattress, and the CC for that is current and will remain so. Mattresses do not retain value, but I feel I should at least pay towards it.

[GWBcasualty]

Ha! I asked my husband what he thought we'd get at a garage sale for our couch and loveseat and he said MAYBE $50...for the PAIR. I said we'd probably end up having to haul it off to goodwill as a donation.

We bought them 7 yrs ago at the PX for like $1000....it's been moved 3 times since then, and through 2 small kids and one teenager in the that time. And now a puppy that likes to chew on the bottom.

Exactly. I have been going over several successfully discharged cases on Pacer and the bottom line is that most of the stuff we own is worthless and needs to be listed as a bunch.
For example "Household goods and furniture" - "Usual and customary" $1,500

But you want to itemize the few things that you absolutely don't want to lose (if you can exempt them) in case someone comes over to your home (very unlikely) and decides they have value.

For example
"Household goods and furniture" - "Usual and customary" $1,500
Fender Stratocaster - $700

Hope this helps.

[JEM]

Exactly. I have been going over several successfully discharged cases on Pacer and the bottom line is that most of the stuff we own is worthless and needs to be listed as a bunch.
For example "Household goods and furniture" - "Usual and customary" $1,500

But you want to itemize the few things that you absolutely don't want to lose (if you can exempt them) in case someone comes over to your home (very unlikely) and decides they have value.

For example
"Household goods and furniture" - "Usual and customary" $1,500
Fender Stratocaster - $700

Hope this helps.

I'm pretty sure we don't have one of those...I don't even know what it is. LOL.

But ya...I really don't think our stuff has any special value.