How you value your vehicle for bankruptcy is very important because it can impact whether your vehicle is fully exempt or only partially exempt and thus whether you would get to keep your vehicle in a Chapter 7 bankruptcy or whether you might have to pay more into your Chapter 13 bankruptcy payment plan.
Chapter 7 Bankruptcy
If you file for Chapter 7 bankruptcy you could use the value based on the private party value found in Kelley Blue Book, NADA, Edmunds or any other reputable vehicle valuation service. You might also be able to show the value based on what you paid for the vehicle if you purchased it outright recently before the bankruptcy. You might also be able to show the value based on what a dealer would be willing to give you for the vehicle. You might also be able to show the value based on comparable vehicles (i.e., similar make/age/condition/mileage) listed for sale on websites such as Craigslist, AutoTrader, etc..
Whatever valuation method you use, you should keep a copy of the paperwork in case the bankruptcy trustee (i.e., the person who manages your case) questions how you valued it.
Chapter 13 Bankruptcy
In Kansas, you can value your vehicle using the private party value from Kelley Blue Book or other reputable vehicle valuation services. You might be able to argue the value is less if you can provide evidence of how much it would cost for necessary repairs.
In Missouri, we must use the NADA Clean Retail value then we can adjust downward for necessary repairs to get the vehicle in “Clean” condition and then we can take another 5% off the value.
Again, it would be important to keep a copy of whatever valuation service you used in case the trustee or a creditor questions how you valued the vehicle.
If you have questions about the valuation process of your vehicle for bankruptcy purposes, please contact W M Law today.