If I File Bankruptcy Will I Lose My Keith Urban Autographed Guitar?
By Andy Miofsky, Illinois Bankruptcy Attorney on Jul 21, 2007 in General Bankruptcy Information
I heard that question at a recent Keith Urban concert. It is a great question, for it has implications among collectors of all types of memorabilia. The answer is probably not.
Personal items are valued at a replacement value for like items in similar condition. While there is a first tier market for celebrity items, the secondary market often draws a fraction of the initial cost. For example, an Elvis autograph from a Detroit Kmart parking lot dated 2004 would be worth more to the person who actually received it than to anyone bidding on EBay. Under the bankruptcy reform act, a lawyer is required to inform a debtor how to value items of personal property. The standard is what the item would cost in a like condition at a retail sale of similar items. A used couch is valued against the retail sale of similar used couches.
Once you establish a fair market value, you are able to apply certain exemptions to protect the item. For example, Illinois permits a debtor to exclude up to $4,000.00 in any personal property. Other states have similar rules. If that guitar squeezes in under the exemption limit applicable to your case, you keep it. The same analysis applies to collectibles of all types.
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