Value of artworks for ch.7 bk

[dina13]

Hi, I have a question. Hoping that someone is familiar with this issue and could share their experience. My husband and I are both fine art painters. We plan on filing ch.7 bk this month. We have no valuable assets except for original oil paintings that we painted in the past few years. We have literally couple hundreds of original artwork painted by us.

Paintings used to sell few years ago - if 8 per year sold we considered ourselves lucky. In the past two years there were no sales except for a few tiny pieces.

I wonder how could we evaluate our work for bk purposes. What I'd like to find out even more is how likely is trustee to grab nonexempt portion of paintings and liquidate them at yard sale prices? Does anyone have any experience with something like this?

[AngelinaCat]

Welcome to the forum. I hope I can give you some help. We have a couple of prints that are old and can be considered 'antique', but, realistically no one would want them when we filed, Dec. 2007, or now--except us.

For the paperwork of our Ch7, we called both of them 'Motel-type pictures', and gave a value of about $25.00 each. And that was too much. We learned that you really have to price things like this at true yard sale prices. I had a different picture at a yard sale, that was in a really nice frame with matte, and etc., I asked $20.00. Only one woman was willing to pay $5.00 for the frame only. I did not take the offer, and carted the picture back home. On the way, we hit a bump and the frame and glass was broken, and the whole thing ended up in the landfill for $0.00.

I know you are creating these lovely works, and they're your BABIES, but you have to really step outside of your own heads, and look realistically at what a stranger will pay for your work.

Good luck, and I am sorry for sounding so down on this. ,

[dina13]

Thank you, Angelina. You're not sounding down, actually your post is really encouraging. I would LIKE our works to cost no more than $5 at yard sale. However, since they are originals, and some retail for over $3,000 (although they haven't been selling lately), I'm afraid that might not be the case.

Would love to hear more info on this. Hey artists and art collectors, where are you hiding?

[AngelinaCat]

You might want to try an 'Advanced Search' on topics like 'Intellectual Property', 'copyrighted works', 'art works'--things along that line.

I remember that a couple of years ago, someone was asking about a manuscript that he/she was hoping to sell, and what they could price or exempt it for. As I recall, this was a manuscript that no publisher had expressed interest in. I think the person got discouraged and didn't come back.

But a manuscript is a stack of used paper, correct? With no tangible value, right? How about a stack of used canvas stored in the garage....? Value there would be a coat of whitewash to 'reformat--as it were' and start over? Just saying.... Especially since they aren't selling, and are taking up valuable storage space--such as a storage unit that you pay $15.00 a month for...

[keepsmiling]

If they aren't selling, they aren't worth 3k. They are worth what someone will pay for it at quick sale. Just like virtually everything else in your house.
That's bad news for you in general, but GREAT news for you at this moment.

[DeadManCrawling]

Good advice above.

These may have retailed at 3k a few years ago, but the trustee will look at it from another angle, and you should too.

If you dragged all of your paintings out to the nearest busy intersection, TOMORROW, and planned to entirely liquidate the WHOLE stock by 5pm, what would you reasonably expect them to sell for? To random passers-by, not art fans.

This is why you can safely claim them as nearly worthless. The trustee would have to, if they wanted to sell the paintings, store them in appropriate climate-control, market them to people who could appreciate their real value, and hold onto them long enough to do all that.

Trustees are not in the business of archiving paintings, books, antiques, etc. Unless you are already famous, BIGTIME famous, the trustee won't be interested, other than (maybe) personal curiosity.

Their goal is to maximize the money for creditors, of course, but to do so, they must move very fast. They will not be interested in your work. If they went to the trouble to hire someone to value the collection, that would be very surprising to me.

I do not mean, in any way, to demean or condescend upon your work, only to comment on the way trustees generally view these things.

As a personal example, when I filed, I owned a tremendous amount of very specialized and vintage audio and video gear. Think of microphones, cameras, and so on, that were and are considered classics in the industry I work in. Easily worth quite a fair amount, probably over 100k. But only to the right people, not to the general public or those who would attend trustee auctions. The trustee regarded these items as "common electronics-used", and didn't lay any claim to them. Had the trustee been interested, it likely would have taken several years to gain any substantial return from them.

The trustees, generally, have more pressing matters. The things that most of us value, are worthless in the eyes of the court.

Good luck to you.

[dina13]

Thank you Keepsmiling and Deadmancrawling. Your posts are truly GREAT news. Your example, Deadmancrawling, is especially encouraging to me.

[despritfreya]

I am going to put a different spin on this. In the past I have represented two artists. Today I am currently representing a third. In each case the question was not "what is the art worth". The question was "do you want to take a risk that a Trustee will liquidate the art and you will not be the high bidder". In each instance the answer was "no".

Each of the three artists (one of whom is doing quite well these days) opted to do minimal Chapter 13s. We valued the inventory quite low and paid a small portion of the unsecured debt based upon our opinion of value. In the two older cases no one questioned the value. We will have to wait to see what happens in the recently filed third case.

If you are below median income you can elect a 36 month Plan. Discuss this with your attny. Ultimately, you, as the artist, must decide what risks you are willing to take.

Des.

[dina13]

Hi Despritfreya, it's good to hear info from attorney's point of view. What if we can't afford ch.13? We're wa-a-y below median - our last year's income was below $10,000.
Also we're using Federal exemptions, and we don't own a home, so we can use a wildcard portion of homestead exemption to cover works. If we do that, do you think it's likely that trustee will go indepth appraising, etc. in order to liquidate works not covered by exemptions, if any?

[AngelinaCat]

If you cannot cover everything using the exemptions, the trustee is apt to offer you a 'buy back' from the BK estate for the non-exempt portion, before offering it at auction to the general public. This happened with us.

Florida has lousy exemptions other than for homestead. And we don't have 'Tools of the Trade' like we thought, so 'Hub's computer equipment for his consulting business wasn't exempt either. So we had about $6,500.00 or so, worth of non-exempt items. The trustee offered us the chance to buy our things back for $450.00 per month for 12 months, totaling $5,400.00, which was a generous discount. We were able to make those payments and we chose to do so.

Here is a link to a very recent discussion of this topic: http://www.bkforum.com/showthread.ph...in-Ch7-Buyouts

[dina13]

Thanks, Angelina. I see that there are actually more ways for us to keep the property we really want than to lose it.

[despritfreya]

What if we can't afford ch.13? We're wa-a-y below median - our last year's income was below $10,000.
Also we're using Federal exemptions, and we don't own a home, so we can use a wildcard portion of homestead exemption to cover works. If we do that, do you think it's likely that trustee will go indepth appraising, etc. in order to liquidate works not covered by exemptions, if any?

I agree with Cat. If we are not talking a large amount over any allowed exemption you should be fine. In my state none of the inventory would be protected and for my clients it was just too great a risk. Will the trustee go in-depth. . . probably not unless you have local notoriety. Art is a difficult thing to value. In the cases I handled two were well known artists, locally and elsewhere but the art market had completely collapsed so the inventory had little value - still neither wanted to take a risk - and I don't blame them. The current case is a bit different. Yes we have finished product but we also have an inventory of rough materials which are quite valuable. We have done our best on estimating value and we will wait to see what happens.

Des.

[dina13]

Thank you, Despritfreya. I guess we'll just have to take a chance. We do have some local notoriety, my husband more than I. However we also have over $10,000 each as wildcard exemption. So we'll do what we have to and will see what happens.

[AngelinaCat]

Good luck to you both! Please check in often, and let us know how it goes. That way, you and we, will be able to help others coming along.

[dina13]

Thank you, Angelina. I sure will update this thread with info on our progress.