In bankruptcy, one must state values for all real and personal property. The valuation of personal property is the “liquidation value,” which is not the purchase price of an item, nor is it the replacement cost, nor is it the price received if you advertised it in the newspaper, Craigslist.com, or on ebay.com. Typically, the liquidation value is what one would receive if the item was sold at a garage sale, or if it was sold at auction. For example, if one paid $300.00 for a couch, it might now cost $400.00 to replace it, but might only sell for $25.00 at a garage sale.
The valuation of real estate is the “fair market value” or the price a reasonably prudent buyer and seller would agree on. What similar properties are selling for in your area is usually a good indicator of fair market value.
If you have questions or are unsure of what value to place on your personal property, ask a dealer how much, in cash, he would pay you for the item (not on consignment). In the case of real estate, consult with a real estate agent.
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