Appraisal Required? Red Flag to Trustee?

[ApresMoi]

I hope to be a 'no asset' Ch. 7 case, but after my attorney told me I need to take the 'high end' value for a few big ticket items I am a little worried. Here's why: Those high end valuations will push me to close to using up all the exemptions available here in CA. I will still be under, just borderline.

Question: A trustee will review my case, and see that, in spite of having virtually no money and hardly any other assets, I own several items of 'unusual value' (listed at several thousand dollars each). Won't that make them take a second look at those items? Won't that make them think they need to get the items appraised?

I have assigned what I was told were 'fair market value' to these items -- what they would sell for at a reputable auction house. I got those values from a specialist at the auction house. It was not a formal appraisal (which would have cost at least $300 per item to have done), but the next best thing.

Since formal appraisals ALWAYS result in very high values, even higher than fair market values, should I be concerned. I would be over the exemption limit in the event of formal appraisals. Anyone have experience with trustees requiring formal appraisals? Will my situation trigger such a request?

[AngelinaCat]

We were told to value everything at 'yard sale' prices. Antique furniture is not 'antique' it is 'old, second-hand'. Jewelry was valued at what a pawn shop would pay for it--not the pawn value--but what they would pay for it if we were selling it.

I have no idea what your unusual items might be, but they must be very unusual for the lawyer to give you the advice he did.

Good luck!

[mtbc]

The important point is that this is not insurance value appraisals, which will be typically the appraisal they'll be offering and are on the high side, it really is how much they'd expect to get were they to go ahead and sell it at auction.

At our 341 the trustee was generally happy with others just so long as he had a plausible story from people about how the valuation happened, and, for things like real estate or vehicles, if he could see a copy of the title. You may well get away with citing your informal conversation with auction experts.

[BKDefender]

AngelinaCat,
In Nevada, we're discouraged from using garage sale and liquidation prices when determining the value. But here we get rather generous exemptions including $12k per filer for household goods, $5k per filer for private libraries, works of art, musical instruments and jewelry, $550k equity in a homesteaded home, up to $15k per filer in one vehicle, $500k per filer for retirement type accounts, unlimited cash value insurance policies with premiums <$15k/year, etc. Because of that, there's rarely a need for someone to be concerned with the value of their items unless they have a really huge house and fell really far before filing BK.

--William

[ApresMoi]

Thanks. I also had a free consultation with another attorney, who, when I told him I had a few items of unusual value, asked how I reached those valuations. When I told him from the auction house, he seemed to be okay with that. I really need to ask around more to be sure.

Had no idea the exemptions were so generous in Nevada, btw. That's pretty amazing. No wonder people set up businesses there (although I assume the exemptions you mentioned apply to individuals, not businesses).

AngelinaCat,
In Nevada, we're discouraged from using garage sale and liquidation prices when determining the value. But here we get rather generous exemptions including $12k per filer for household goods, $5k per filer for private libraries, works of art, musical instruments and jewelry, $550k equity in a homesteaded home, up to $15k per filer in one vehicle, $500k per filer for retirement type accounts, unlimited cash value insurance policies with premiums <$15k/year, etc. Because of that, there's rarely a need for someone to be concerned with the value of their items unless they have a really huge house and fell really far before filing BK.

--William

[ApresMoi]

tx. well, i certainly think if i list the auction house estimates that that would be fair. just didn't know if i "needed" to list them that way, as that's much higher than the "garage sale" value everyone talks about. a trustee is not going to get appraisal prices in the event of a sale.

******

The important point is that this is not insurance value appraisals, which will be typically the appraisal they'll be offering and are on the high side, it really is how much they'd expect to get were they to go ahead and sell it at auction.

At our 341 the trustee was generally happy with others just so long as he had a plausible story from people about how the valuation happened, and, for things like real estate or vehicles, if he could see a copy of the title. You may well get away with citing your informal conversation with auction experts.

[aljohnson007]

Once you state the value, you can almost never go lower. If it were me, I would list it at yard sale value and let the TT decide if it's ok which they usually will. In other words, if you wanted to sell the item(s) today, what would they fetch? JMO