Part of the bankruptcy petition process requires that debtors itemize and place a dollar value on all assets and personal property. This is done to determine if any property value exceeds the allowed exemption in the state of jurisdiction thus qualifying it for liquidation.
Replacement Value
Schedule B of the bankruptcy forms is where all personal property will be listed out and valued. This form is broken down into categories, making it easier for petitioners to include all property and not miss anything.
On this form, the value used is the items replacement value, that is, the amount of money one would expect to pay to purchase the item in it’s current condition.
For example, a car would be worth the current market value found in a Kelly Blue Book, or the going rate for such a car in local classified advertisements.
Be Thorough
It is critical that the petition include al personal property, exempt or not. Many petitioners are tempted to leave certain property out of the petition in hopes of saving it from liquidation.
This will not only get a case dismissed, but may be seen as bankruptcy fraud, which is a crime punishable by jail time.
More often than not, chapter 7 bankruptcy filers will keep all of their property. Either by exemption or trustee “abandonment”, almost all personal property will remain with the petitioner.
Talk to a Bankruptcy Lawyer for Advice
There are a wide array of laws and legal strategies that may be employed to keep personal property, and maintain wealth during a bankruptcy proceeding. Much of the strategy is done prior to filing the bankruptcy petitioner, which include allowable ways to transfer non-exempt assets into exempt ones.
It is critical that anyone considering filing for bankruptcy get legal advice from an experienced bankruptcy attorney early on to ensure no money is wasted, and that all property will be protected.
