Value of assets is an important part of bankruptcy filing
The value of possessions and other assets claimed in a bankruptcy is as important as the amount of debt that is owed. For many people, determining their assets' value is more difficult than adding up their bills. However, there are resources for accurately estimating one's bankruptcy estate when filing a petition in the U.S. Bankruptcy Court.
A person's net worth is what is left after their debts are subtracted from the value of their assets, tangible and intangible.
Bankruptcy attorneys have different approaches to compiling asset values, according to BanktuptcyLawNetwork. Some ask their clients to do an exhaustive inventory of their household belongings, estimating their worth based on second-hand sales rather than was originally paid. Others use their experience in bankruptcy court to arrive at a fair average for personal belongings in total - for instance, $15,000 for the household - while including the additional value of special collections they may own.
There are exemptions built into state and federal laws that allow those filing bankruptcy to retain their home, car, furniture and personal items up to a specific amount. Valuations vary state to state according to cost of living, median income and other factors that influence the fair cost of property. Federal exemptions often are used if a state exemption doesn't apply or will not provide the same amount of protection.
A professional appraisal, which usually costs several hundred dollars, can be done to determine a home's value. In some court districts, debtors are also allowed to submit "opinions of value" from local real estate agents, who often provide this service at no charge.
Other professionals can help determine the value for specific items. Car publications list the market value of vehicles, jewelry can be appraised by jewelers and specialized collections of stamps or coins are listed in catalogs. Some districts will consider online auction selling prices for certain items, such as a collectible autobile that may not be fully covered by the debtor's vehicle exemption.
Intangible assets also must be listed in a bankruptcy filing, although many are covered by exemptions, according to Lawyers.com. They may include the value of retirement plans, annuities, stocks or deferred compensation programs, as well as cash in checking and savings accounts. When a debtor is a part owner of an asset such as a vacation home, the market value of their share of the property must be declared.
Sign up for a free bankruptcy attorney consultation to have all your questions answered.