How to Value Personal Property on your Bankruptcy Schedules

23 Jun How to Value Personal Property on your Bankruptcy Schedules

It may work differently elsewhere, but in Massachusetts we aren’t interested in your clothing. However, here and elsewhere, anyone filing bankruptcy must value their personal property on their schedules, including their clothing, furniture, books and pictures, and other assorted knickknacks. Schedule B has categories for all these things and everyone has them, so everyone must list and value them. But how do you do this? We get many calls from people flummoxed by the concept of having to put a value on their personal items. Some people will even state that they have none of these items while attending meetings at our office fully-clothed. Actually, it’s quite simple in the vast majority of cases to value your personal property on your bankruptcy schedules. Here’s what you do:

You do not typically have to itemize personal property items within a category such as clothing or furniture. We will usually put “Miscellaneous items, no item worth more than $450” on Schedule B unless there is an unusually valuable individual item. However, whether property in a category is listed collectively or not, it must be fairly valued. What value to use? The correct measure of value is “current market value.” See, e.g., Schwab v. Reilly, 130 S. Ct. 2652 (2010). This is what a buyer would pay now for the item at its present age and condition. Consequently, what you bought your shirt for at Casual Male in the 90s is irrelevant, what matters is what someone would pay for it now in its used condition. As you might imagine, for many personal items, the current market value is quite low, so usually a common-sense, good faith estimate that you pull out of thin air will be just fine. However, in case of doubt, browsing ebay will usually help guide your estimations. The key is to be honest and value property in good faith. If you do this, you’ll be fine. Chapter 7 trustees have no real interest in the standard personal effects that most people have.

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Nicholas Ortiz, Boston Bankruptcy Attorney

From Attorney Ortiz: We have been helping consumers and small businesses in Massachusetts successfully navigate through the bankruptcy process since 2002. We offer free initial consultations and payment plans. Call us at 617-716-0282 to discuss your debt relief options. Mention the Bankruptcy Law Network when you call!
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