11 Jan The â€œCamaro factor” in Bankruptcy Preparation: Use Real Values.
It is the rare occurrence when I meet a prospective bankruptcy client who actually recognizes that the value of the pile of scrap metal in their backyard is virtually worthless. More often they tell me how they are putting the old car back together and it will be worth thousands. After all, itâ€™s a collectorâ€™s piece now, having gone out of production 40 years ago.
I think itâ€™s great that someone wants to spend the time, energy and money to restore an old vehicle. Itâ€™s a pretty healthy hobby. But for my purposes and to accurately evaluate the worth of a clientâ€™s property, Iâ€™d rather have a true picture of the value now.
If, on the other hand, the car is coming to life again, and will be up and running with a few tweaks: I need to know that too. Usually there is no way to get the true picture without visiting the backyard or having the client get current photographs.
The bankruptcy code requires, under penalty of perjury, that the values put down on the paperwork are accurate. Determining the worth of an old car that runs isnâ€™t too tough: there are all sorts of ways to do that on the internet. But determining the value of a non-running, half-rusty, pile of scrap-metal is a lot tougher. I tell my clients to honestly tell me what they would pay for the â€œcar.â€
The most important issue is to be as accurate as you can be. There are significant repercussions to undervaluing your property. Provide as much information as you can to your attorney and work together to put down realistic numbers.
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