Putting a value on something is a difficult task. A bottle of Diet Pepsi at the convenience store down the street from my office in Washington, PA costs $1.50. That same exact bottle of Diet Pepsi would cost $5.00 at a fancy hotel in New York City. So, what is the value of that bottle of Diet Pepsi? The answer is . . . it depends! Under the law, when an individual files for bankruptcy, they have to list all of their assets and assign a value to those assets. This is done for a number of reasons, but I don’t want to focus on why you must do so. This focus of this article is on how to value the assets that you have for bankruptcy purposes. Luckily, for purposes of assigning a value to your assets when filing for bankruptcy there is a much more concrete answer than “it depends.” In fact, in assigning a value to an asset for a bankruptcy filing, the answer will almost always present itself after asking yourself one very important question. “How much would someone pay me for this item, in its present condition, right now?” For example, you own a diamond ring with a purchase price of $10,000. Some would say that the ring then is worth $10,000. However, when putting a value of this item down on your bankruptcy petition you must first ask yourself the above-mentioned question. “How much would someone pay me for this item, in its present condition, right now?” To get that answer you would take the ring to a jeweler and ask them how much they would pay you for the ring. In this particular example, let’s say the jeweler says, “I will give you $2,000 for that ring”. We have our answer! We would list the value of the ring on the bankruptcy petition as $2,000. For some items, like regular household items, making your own estimate of value is probably OK. No one expects you to spend hours trying to find out how much someone would pay you for your refrigerator. However, for certain items, like real estate, vehicles, and expensive jewelry, having a third party valuation is often a very good idea. For real estate my office generally will use a market analysis from a real estate agent or a relatively recent appraisal. For vehicles, we generally use a Blue Book or NADA value. When filing a bankruptcy with my office, we will help you with determining how to go about getting a value for your assets. Most of the time the criteria that we will be using is that very important question: “How much would someone pay me for this item, in its present condition, right now?”
