If you are a car owner and you file for bankruptcy, then you have to list the bankruptcy car value on papers. The replacement value is the accepted standard used to get the value of a car, SUV, RV, van, motorcycle or any other vehicle. By definition, replacement value can be described as the price a retail merchant would charge at the present time for your car’s make and brand. In other words, to get your car’s replacement value, you first need to determine that amount it would cost you to replace you car with the same model, age and condition, on the date of filing for bankruptcy.
There are several ways through which you can the replacement value of your car. Basically, the age and condition of the car are the major factors used to determine your vehicles market value. One of the popular ways of getting a replacement value is through trade publications. Many Chapter 7 trustees look up to trade publications to determine replacement value for vehicles. Though these publications provide a common industry standard, but they have limitations. They don’t consider certain car conditions such as broken air conditioning unit or your transmission that needs to be replaced. Such damage, if not considered, will further reduce the value of your car. Another limitation is that trade publication represent a retail asking price, and not the final sales that is negotiated between seller and buyer.
Given these limitations, it is recommended to use trade publication values as a starting point. Afterwards, you need to consider other factors including the vehicle’s condition as well as market forces. This will help you get an appropriate replacement value for bankruptcy purposes. On the other hand, if you car is in great shape and condition, then the trade publication can be helpful.
The importance of getting an accurate bankruptcy car value cannot be over emphasized. Whether you are filing a Chapter 7 or Chapter 13 bankruptcy case, it is ideal to get an accurate written valuation for your car. Upon providing values for any property including your car, the bankruptcy petition is signed under penalty of perjury. In this case, you have to disclose all your assets along with their corresponding values. If you fail in this regard, it may result in a dismissal of your bankruptcy proceeding, fines, penalties and loss of your discharge.
