If you are ever in the situation where you need to file for bankruptcy, and you own a home, you will probably need a bankruptcy appraisal. Choosing a qualified bankruptcy appraiser is important because there are a lot of moving parts in this process and having an accurate market value of your assets is critical.
 · Why Are Bankruptcy Appraisals Important? If you are applying for Chapter 7 bankruptcy, your goal is to liquidate your assets — house included – in order to settle your debts. Your bankruptcy appraisal can influence whether you’re approved for Chapter 7 or whether you must apply for Chapter 13 bankruptcy instead.
A bankruptcy appraisal is the best way to prove to the court that your value, as written in your bankruptcy documents, is accurate. The experience, credibility and industry reputation of the appraiser are critical to the bankruptcy judge in accepting or …
To determine whether you'll be able to protect your home, you'll need an accurate home valuation. Next, you'll deduct the mortgage balance and determine the equity. If the equity is less than the amount of the homestead protection available, your house will be protected in bankruptcy.
When valuing your personal property in bankruptcy, determine the replacement value of the asset. Replacement value is the cost of replacing an asset with an item similar in age and condition. It's what a retail merchant would sell a like item for after taking into account its shape and age.
If your home is worth more than the amount you owe on your mortgages and other property liens, then you have equity. Home equity is considered an asset in your bankruptcy.
The trustee wants cooperation, understanding, and a fair resolution to the asset negotiation. If you go into the negotiation with those desires in mind, you are more likely than not to obtain a fair deal for your client. It would be great if we never had to worry about negotiating an asset case with the trustee.
Use Internet market websites to value common household items. Sites such as eBay, craigslist and national retailers list current retail prices for virtually any common item. Prices on these sites represent what the average consumer is willing to pay for the same item.
Fair market value is defined as “the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts.” To determine your property's fair market value, the best method is to compare the prices others have paid for something comparable.
If you kept your house throughout the bankruptcy process, you are free to keep your home after the bankruptcy – as long as you continue to pay the mortgage. It may be that after you are free of all the rest of your debt you will be able to afford the mortgage payments easily. If so, you'll be able to keep your house.
Bankruptcy Exemptions: What Property Can you Keep In Chapter 7 Bankruptcy?Houses, Cars, and Property Encumbered By a Secured Loan. ... Household Goods and Clothing. ... Retirement Accounts. ... Money, Jewelry, and Other Property.
Is a trustee able to sell trust property? Yes. A trustee has the powers of an absolute owner and can even postpone a sale. However, in order to sell any property there must be at least two trustees able to sign the contract for sale.
An Increase in Income During Chapter 13 You can use Chapter 13 to retain some of your assets, but discharge all or a lot of your debts. The court will give you three to five years to pay your debts on a set schedule rather than the original rate determined.
As a part of the liquidation process, a court-appointed trustee is assigned to a bankruptcy estate to gather and oversee the debtor's nonexempt assets. Nonexempt assets aren't protected under the Bankruptcy Code and are sold for cash. The cash is then redistributed to creditors.
To get a full appraisal, you hire a licensed real estate appraiser who inspects your property and prepares a lengthy report, containing information on your home and information on sales of comparable homes. Based on that information and any other factors the appraiser finds necessary, the appraiser will set a value and explain the valuation.
Full House Appraisal. A full appraisal will give you the most accurate value for your property. If you refinanced your home or modified your loan, you might have a recent appraisal. What is considered a recent appraisal will depend on current housing climate.
Chapter 7 bankruptcy. If the equity exceeds the available homestead protection, your house may be at risk in a Chapter 7 bankruptcy. The bankruptcy trustee would sell it, pay off the mortgage, give you your exempt equity, and distribute the remainder to creditors. Chapter 13 bankruptcy.
As a result, a "quick sale" value is not helpful to you when you are considering bankruptcy. Also, if you rely on an artificially deflated value, you might incorrectly assume you can keep your home.
A bankruptcy trustee will sell a house the same way a homeowner would—by hiring a real estate broker to market the property. As a result, a "quick sale" value is not helpful to you when you are considering bankruptcy. Also, if you rely on an artificially deflated value, you might incorrectly assume you can keep your home. It's important to get it right because many Chapter 7 bankruptcy judges won't let you dismiss your case just because it turns out that you'll lose property that you thought you'd be able to keep.
Your locality may have a property tax appraiser that values your property for real estate tax purposes. These valuations are rarely utilized in a bankruptcy proceeding. The property tax appraiser will often use methods that are not acceptable appraisal methods for sale purposes and often the value is not an accurate representation of the market value of the home.
The information you can obtain might provide you with confirmation of your understanding of your home's value. If not, you can get a more formal valuation, if necessary.
When filing for bankruptcy, you must supply the court with a summary of your current financial situation. This summary will include information about your current income, your current debts, and the value of any assets you own.
If you are applying for Chapter 7 bankruptcy, your goal is to liquidate your assets — house included – in order to settle your debts. Your bankruptcy appraisal can influence whether you’re approved for Chapter 7 or whether you must apply for Chapter 13 bankruptcy instead.
Hiring a trustworthy and experienced appraiser is one of the most crucial decisions you will make throughout this process.
At Authority Appraisals, we have the experience and expertise that you need during a bankruptcy.
Much like the appraisal required for getting a mortgage loan, a bankruptcy appraisal report establishes an opinion of your home's fair market value. By comparing your home to between three and six recent house sales in your neighborhood, the appraiser uses factual data to support the value certified in the report. While the certified appraiser establishes a specific market value of your home, like all appraisals, the resulting number is an opinion of value.
The bankruptcy judge has final authority for all proceedings, including accepting or rejecting your home appraisal report and value. This authority to make or break your bankruptcy petition makes it crucial that the person or firm performing your bankruptcy appraisal prepare a thorough, detailed and strongly supported report. Typically, bankruptcy judges will only accept state-licensed appraisers with a proven history of preparing accurate appraisals. The court recognizes the importance of a strongly supported appraisal, as should you and your attorney, to permit a successful bankruptcy filing.
While few appraisers perform only bankruptcy appraisals only, there are typically some highly experienced, well-respected appraisers, with a proven history of creating high-quality bankruptcy appraisals, in any area. Choosing an appraiser who specializes in performing bankruptcy appraisals is a wise option. Veteran bankruptcy judges tend to be more comfortable receiving appraisal reports from appraisers that understand the process and the significance of preparing a fully supported real estate appraisal for bankruptcy proceedings.
Depending on the size of the property, the on site appraisal inspection takes 20-30 minutes and we can deliver a 24 hour turn around time with the report. The appraiser will take photos of both the exterior and interior, measure the exterior, and sketch the floor plan. They will also take notes on condition, quality, and various amenities.
Once a judge receives the appraisal report, they will thoroughly review it to make a determination. The judge could potentially release debts in a Chapter 7 or approve a repayment plan in a Chapter 13. These impacting factors involved are critical which is why it is important to obtain an accurate bankruptcy appraisal.
The appraisals performed for either purpose are similar in that the inspection is performed and the Sales Comparison Approach is utilized to develop the fair market value. The results are based on relevant market derived data.
There are times when expert testimony may be required to further explain the results. Fortunately, we have performed expert testimony many times in front of commissioners in 6 counties as well as a NJ State judge. With this experience we are comfortable in explaining and supporting our valuation.
It's not the cost of replacing your items with new items. The value will likely represent the amount you paid for the item, minus deductions for wear and tear. The current or fair market value will be what a reasonable person would be willing to pay for your items. You'll list the current value as of the date you file for bankruptcy.
When completing the bankruptcy forms, you must provide the value of each item of your personal property, such as cars, furniture, jewelry, and the like. You will list these values on Schedule A/B of the bankruptcy forms, as well as a few other forms.
A reasonable way to value your household items would be to visit various thrift stores, such as Goodwill, or local flea markets and garage sales , to see what comparable goods are selling for. Keep a record of the dates and locations you visit to support your valuation. You can also check online sales or auction sites. Wherever you find your values, make sure to list the age and condition of the property to give the trustee a better idea of what you are valuing.
You could also have your car appraised. Some car dealerships will provide an appraisal, but you need to be careful that they are not providing you with a trade-in value that is dependent on your buying a new vehicle from them. The appraisal should represent the amount you would need to pay to replace your current car.
Although often unnecessary, you can always use an appraisal for any household item that's of particular value, such as any antiques that you might own. Keep in mind that you likely won't need to go to the expense unless the bankruptcy trustee appointed to your case is attributing a value that you don't agree with.
You're likely familiar with valuing a car or truck. It's not much different in bankruptcy.
These types of items could need an appraisal. Make clear to the appraiser that you are looking for a current sale value appraisal and not an appraisal for insurance. The valuations may be different.
It is not an appraisal. The CMA compares homes of similar size, condition, age, and style in the same area or neighborhood that are currently on the market, under contract and that have recently sold. The comparables will in most cases better reflect the actual value of a home.
While most real estate agents will provide you with a Comparative Market Analysis of your home at no charge, some real estate agents may charge you if you are not putting your house on the market.
It will depend on what state you live in as to the amount of equity you can protect in your house. Value of the home minus the amount due and owing on the loan = EQUITY.
I then proceed to Zillow and Yahoo Real Estate. These are websites that the trustees use to evaluate the property at first glance. If these are in your favor then I would submit these to the court to support your value. I stress to my clients that the name of the game is document, document, and document. You have to prove your case every step of the way. Don’t rely on your on your attorney to do all the work. You are in a court of law and it is your duty/responsibility to prove your case.
You can request estimates for roofing, siding, paint, flooring and foundation. Remember a picture can be worth a thousand words. If you think a picture would explain why the value is way over priced than by all means take a picture and submit it to your attorney.
The whole point of filing bankruptcy is to regain financial control but the law does not require that you pay an arm and a leg or even a house in order to do this.
In valuing a property you can always pay for an appraisal of the property. My view is that filing a bankruptcy is expensive enough so why not try and save a little money. Save the appraisal for the last resort.
Many new homes do not come with complete landscaping and you will have to invest in the home before you can turn around and sell it. Step back and look at the property as if you were purchasing it for the first time. What would you want done to the house before you purchase it? These are the things you want estimates for.