Car value

[billjacobs]

Does anyone know how to properly determine a car's value for the purpose of trying to exempt it?
I've looked at KBB, but don't know which value is used. Retail, trade in, private seller.

Thanks!

Bill

[justbroke]

Generally speaking, most Trustees and Courts use "clean retail". Yup, that's right, clean retail for purposes of valuation. Not all District use Kelley, as some use NADA or Black Book. You would be okay to use "clean retail".

If you're going to redeem a vehicle, you get to use "wholesale" value ("clean trade-in").

[keepsmiling]

More bass ackward BK stuff.
Sometimes you just have to scratch your head.

[billjacobs]

Well at least I was kind of planning worst case when trying to factor my exepmptions. I know my attorney knows all this stuff, I just wanted to have an idea what she's talking about when I meet with her next.

Thanks!

[jst4f]

We used Carmax value and it was excepted without question.

[keepsmiling]

We used Carmax value and it was excepted without question.

Really, the only thing that makes sense.
Otherwise can lead to stupid situations, where the tt takes the car, tries to sell it, and can't get the value for it. Aggravation for everyone. Happened a few months ago to someone here.

[justbroke]

It really depends on the Trustee and whether they trust the valuation method. It can become really important in cases where a thousand in value could mean the difference between asset and no-asset case.

Valuation also is different if you're redeeming versus retaining and exempting, and can vary based on a Chapter 13 versus a Chapter 7.

[LadyInTheRed]

It really depends on the Trustee and whether they trust the valuation method. It can become really important in cases where a thousand in value could mean the difference between asset and no-asset case.

Valuation also is different if you're redeeming versus retaining and exempting, and can vary based on a Chapter 13 versus a Chapter 7.

I think this nails it. It depends on the trustee and the facts of the specific case.

One of my cars was brand new and the value was really irrelevant since I owed more than it was worth that soon after purchase. I used KBB private party "fair" condition value for my 11 year old truck and it wasn't questioned. But, I had enough unused wild card exemption to cover more than twice the retail value. If that wasn't the case and the trustee didn't think I was paying enough to my unsecured creditors to cover what she thought was the non exempt value, maybe she would have objected to my valuation.

billjacobs, I suggest gathering all relevant information you can on the value of your car and giving it to your attorney along with an explanation of what you think the value is and why.

[Kristy12]

If you're going to redeem a vehicle, you get to use "wholesale" value ("clean trade-in").

Thank you. My car is worth 6000 retail but only 3300 wholesale. I would like to redeem it in my chapter 7; but would have a hard time scrounging up 6000. Will I be able to redeem my car for 3300 if the car secures a 12000 consolidation loan? I would like the loan forgiven in chapter 7, but would like to offer the credit union 3300 for the car. Suggestions?

[justbroke]

Thank you. My car is worth 6000 retail but only 3300 wholesale. I would like to redeem it in my chapter 7; but would have a hard time scrounging up 6000. Will I be able to redeem my car for 3300 if the car secures a 12000 consolidation loan? I would like the loan forgiven in chapter 7, but would like to offer the credit union 3300 for the car. Suggestions?

Yes, you could redeem it with any security attached. The credit union will probably fight since they are amongst the most aggressive creditors (and with reason). You would need to find financing for the $3,300 redemption price. You would need to file a Motion to Redeem and submit evidence, as exhibits, showing the valuation. You will also need to show where you would get the money for the redemption.

If you're looking for financing, 722 Redemption (a US Bank company) does these every single day. The interest rate will be very high (in the twenties), but you could refinance (as I did) 6 months later. (I refinanced at 7.9% in 6 months!)

In my Motion to Redeem, I used valuation from Edmunds AND Kelley Blue Book and took the average of those too (clean trade-in). I also took money off for tires and some minor mechanical issues. At first, the lender barked at the Redemption, but their attorney called me 2 weeks before the hearing and gave me a LOWER redemption amount than I was asking if I would do a stipulated Order on the Redemption!

[Newposter]

This is interesting.

My car shows NADA "clean retail" at $5,000. But...the insurance company nearly totaled it after the last accident...claiming KBB fair condition at $2500 when the repairs were close to that value. Shop cut a lot of corners to get under $2k on repairs. Lots of stuff still wrong, but had to accept that or lose the car

I owe nothing on it....and couldn't come up with the money to buy another...or make payments either.

Does it matter that the car is the sole transportation for myself and my disabled parents? I am their sole caregiver. I am the only one able to drive in the house. (They are 94 and 90).

Does it matter that the car has been in so many accidents I tell people that the ash tray is original.

[LadyInTheRed]

Newposter, the insurance company has completely different motivations than a bankruptcy trustee. Do what I suggested billjacobs do in my post above.

I am unaware of any exceptions to exemptions based on need. That would probably depend on your state's exemption laws.

The value is a potential point of negotiation. The debtor takes a position on the value. The trustee can accept it or file an objection (hopefully after asking questions). If an objection is filed, you and the trustee both give evidence for your valuation and the judge decides.