Valuing assets in bankruptcy

by Cathy Moran, Esq.

November 6, 2007

Your stuff, for most bankruptcy purposes, is worth what you could sell it for. That doesn’t sound like a startling proposition. But there is something funny going on in the heads of my clients when I ask them what their “stuff” is worth.

Me: What are the contents of your home worth?

Client: $15,000.

Me: Oh, really? Could you sell it for that?

Client: Oh, no….most I could get is $2,000.

Me: Well, then, that’s what it’s worth.

I still haven’t figured out what “value” or “worth” means to clients. Haven’t figured out where that $13K difference goes. But, this happens so often that I know there is something I don’t understand going on in their heads.

Value matters, since that’s what exemptions are calculated from and that is how an IRS lien is valued. Overestimate the value of your “stuff” and you will pay (too much) down the road.

So, imagine a garage sale or an eBay listing. What would some stranger pay for your “stuff” in its present condition? That’s what it’s worth.

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Cathy Moran, Esq.

I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.

Last modified: March 24, 2010