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: Florida Bankruptcy LawMake Sure Your The Value Of Your Automobile On Your Bankruptcy Petition Reflects The Depressed Used Car Market
By Jonathan Alper
Bankruptcy trustees have in the past determined the value of a debtor?s car by using the average of the wholesale and retail value in the NADA car book (the yellow book). In the past few months car values have plummeted because of the credit problems in the economy and the overall recession. The NADA book has not kept pace with the decline in car values. This week I discovered that some bankruptcy trustees in our division are encouraging debtors to get trade-in appraisals from national car companies such as Carmax. The Trustees are accepting these appraisals in lieu of the NADA values.
For example, one of my clients filed a bankruptcy petition on which he valued a used car at $3,000. There was no lien on the car. The car had, therefore, $2,000 of non-exempt equity. At the creditors meeting the Trustee encouraged the debtor to get a current appraisal. The next day the debtor obtained from Carmax an appraisal of $500 for the same car. Bankruptcy debtors should get market appraisals for their cars before filling out bankruptcy petitions. Your bankruptcy attorney is not a car valuation expert, and he is unlikely to change your valuation of your vehicle. The market for used cars is almost as depressed as the real estate market. Debtors should insist that their vehicle equity is based on current market values rather than slow-changing valuations in used car price books.
posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida
Full post as published by Florida Bankruptcy Law on November 12, 2008 (boomark / email).
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