How should I value my property when filing for Chapter 7? 15 Answers as of July 11, 2013

I'm selling some of the tools I used for my tractor repair business, that I purposely didn't file as exempt, to a friend. Is the value of the tools their market value or the money that I will get from him?

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CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
Get 3 prices on the web.
Answer Applies to: California
Replied: 6/29/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
If you are receiving a fair price from your friend then you may use the value that you are receiving. If your friend is getting a discount because they are your friend then you should use the Fair Market Value. Fair Market Value is the value that you could get for your items if you were to sell them to a third party on the open market. This is not the price you paid (unless bought recently) or how mug it would cost you to replace the items.
Answer Applies to: New Hampshire
Replied: 6/28/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If you have filed bankruptcy you can not sell any of your assets unless the trustee has filed a "no asset" report. If the trustee has abandoned them by filing the report, you can sell them for what you can get for them. I'm hoping that when you say you didn't list then as, "exempt," you did in fact listed them as an asset on Schedule B. Failure to list assets is bankruptcy fraud.
Answer Applies to: California
Replied: 6/27/2011
Jackson White, PC
Jackson White, PC | Spencer Hale
You should value the tools at their fair market value. Your friend should pay a fair value for the tools. If you did not claim the tools as exempt and you have already filed you should not sale the property.
Answer Applies to: Arizona
Replied: 6/27/2011
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
Your attorney should be able to help you value the tools. Otherwise you should value the tools based off what they sell on average for on eBay or some other commercial database.
Answer Applies to: Connecticut
Replied: 6/27/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    The value is what a trustee would get if he sold it. Most trustees are sophisticated enough that they will get what the items are worth. If you do not exempt the property, the trustee should get all the proceeds. If you sold them for less than market value, the trustee can recover the goods and sell them for what they are worth.
    Answer Applies to: Michigan
    Replied: 6/27/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    You have a problem if you didn't list your tools. If you've already filed, all your property belongs to the trustee. S/he may or may not want to sell it. You value it at resale value- what the trustee might get at auction, perhaps. There may also be an exemption for tools of the trade. I recommend you file an amendment now, and sell the tools to your friend if the trustee doesn't want them.
    Answer Applies to: Virginia
    Replied: 6/27/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    The fair market value is the about a willing buyer will pay to a willing seller. In the context of a liquidation in bankruptcy the price may approximate garage sale value, although that is not the standard used. If the property is actually sold presumably that is the market value. Property cannot be sole to hide assets or devalue the assets. A sale to a friend should be for market value, not lower.
    Answer Applies to: California
    Replied: 6/27/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    If you have already filed your case, you are not supposed to sell any non-exempt property without the permission of the Trustee. For bankruptcy purposes, property should be valued at the price you would receive from an unrelated purchaser.
    Answer Applies to: Colorado
    Replied: 6/27/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    The valuation is always replacement value. If you sell anything prior to filing you must get fair market value for it. Selling assets to friends or rleatives is highly suspicious
    Answer Applies to: California
    Replied: 6/27/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    The value of your property that you list on your bankruptcy petition equals garage sale value.
    Answer Applies to: Washington
    Replied: 6/27/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    First of all, your post makes it obvious that you are (1) filing without a lawyer (which is a huge mistake that could cost you dearly), and (2) asking us how to commit a fraud on the court and break the law. Selling your tools during the case is simply not allowed. Selling before the filing may cause problems with the filing. Valuation of property is something to do with the advice of counsel, and you may also be able to exempt, if you know how to tweak them, things that you didn't realize could be exempted. So stop your present plans and get a lawyer.
    Answer Applies to: Georgia
    Replied: 7/11/2013
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    By definition the value you are able to sell something for after normal marketing efforts is the market value. The value you use for scheduling purposes in a Chapter 7 is the liquidation value, which is what you could get for the items in a "quick sale" scenario. What you are selling them to your friend for is irrelevant (except that if you sell them for less than fair market value prior to filing your bankruptcy case, your friend can be sued by the Trustee in your case to recover the value transferred).
    Answer Applies to: California
    Replied: 6/27/2011
    Ellahie & Farooqui LLP
    Ellahie & Farooqui LLP | Javed Ellahie
    I don't understand why you didn't exempt. If they are listed and exempt then they are yours to sell but wait until the trustee has had an opportunity to challenge the exemption (trustee has upto 30 days after the 341 to object). The chapter 7 itself closes about 2 months after the hearing, I recommend waiting until the case closes. Check with your attorney to see exactly when the court closes your case.
    Answer Applies to: California
    Replied: 6/27/2011
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