Valuation of Assets in Bankruptcy

Valuation of assets in bankruptcyValuation of property or assets in bankruptcy is an important element of any bankruptcy, including Chapter 7 and Chapter 13 bankruptcy. The proper standard of valuation has been the subject of considerable debate and litigation.

Some of the controversy surrounding valuation of assets in bankruptcy has been ameliorated by the passage of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). The standard usually applied in determining the value of an asset for purposes of bankruptcy is the price a retail merchant would charge for property of that kind, considering the age and condition of the property. This definition complies with the BAPCPA use of a replacement value standard, meaning the replacement value of the property at the time of filing, without considering the cost of sale or marketing.

Using the metric described above, the bankruptcy practitioner or debtor may be able to deduct certain elements inherent in a retail sale from the valuation apparently adopted by the BAPCPA. For example, the debtor might be able to deduct from the value of the asset, the retailer’s profit and possibly the cost of reconditioning the property. The cost of reconditioning the property appears to be a deduction that is more clearly provided for under the BAPCPA, as the standard is the price a retail merchant could charge, considering the age and condition of the property. A deduction for the retailer’s profits is less clearly provided for under this more commonly adopted standard for valuation.

An important element of the standard definition of value of assets is the price a retail merchant could charge for property of that kind. Certain assets that are valued in a bankruptcy are of a class sold in a retail environment. Examples include new and even used automobiles.

Used furnishings and household items, however, are often the subject of valuation in bankruptcy, and typically such assets are not sold by retailers. Used furnishings are typically sold by consumers directly, through garage sales or Craigslist, or by vendors such as Salvation Army or Goodwill. There is no retail marketplace for used furniture. In such instances, according to the definition employed, should the retail value be determined to be zero?


The retail or replacement valuation standard only applies to valuation of claims and not valuation of property for exemption purposes. For example, a debtor seeking to value or determine the secured status of an automobile in a Chapter 13 bankruptcy is directed to use the retail or replacement value. A debtor seeking to value the same automobile for purposes of either utilizing an available exemption or a liquidation analysis should use a differing standard. This standard should properly be described as what the debtor or bankruptcy trustee would receive if he or she sold the asset either at an auction, garage sale or pawn shop. This may be referred to as an auction value or a liquidation value. This value is obviously more beneficial to the debtor and is more firmly anchored in how bankruptcy actually functions than a retail standard.

Many detractors have criticized the use of a retail standard because the creditor is awarded the benefit of using such a standard without the actual requirement that such creditor engage in the activities required of a retailer, including the storage and presentation of the asset to potential purchasers, or incurring additional costs relating to the sale or marketing of the asset.

The following is a list of appraisers available to conduct valuations in the Middle District of Florida, Tampa Division. This is not an exhaustive list. There are undoubtedly other persons or companies available for appraisals. This is only the list that the author of this article was able to assemble through his own research and efforts. The author makes no representation as to the quality or acuity of the following appraisal companies and appraisers:

John Schweitzer performs real estate appraisals only. Fee is approximately $350. Prefers to perform appraisals in Pinellas County. Experience in bankruptcy court.

2. TAMPA BAY APPRAISALS (727-799-8222)
Doug Nail performs real estate appraisals only. Fee is $325-$375. Will perform appraisals in Pinellas, Pasco and Hillsborough County. Fee is more if required to testify in bankruptcy court.

Real estate appraisals only. $450 starting fee. Cover 10 counties.

Amy Keener performs real estate appraisals only. $375-$450. Will testify in bankruptcy court if necessary; additional $125/hour. Hillsborough and Pinellas properties only.

5. CLIGGITT VALUATION (863-661-1165)
Mike Cliggitt performs mostly commercial real estate appraisals. Fees are $1500-$4,000 but can range higher. Available for appraisals in Polk, Hernando, Hillsborough, Pinellas and Pasco Counties.

Performs automobile, motor home, truck, and mobile home appraisals. Serving Hillsborough, Pinellas, Sarasota, Manatee, Pasco, Hernando, and Polk Counties. Website is . $125 per vehicle; discount offered for multiple vehicles. Call Joe Wood.

7. TAMPA AUTO APPRAISALS (1-877-868-9123)

Contact Ray Nugent. Appraisals of personal property, jewelry, collectibles. Website is Fee is approximately $120-$150 per hour.

Contact Paul Amirto. Real estate appraisals only. Pinellas, Hillsborough, Pinellas Counties. $375. Additional fees in some instances depending upon location of property.

10. MARIAN AUBRY (1-941-544-6806)
Ms. Aubry performs personal property appraisals. $150/hour minimum charge. Travel is charged at ½ rate

11. JANE BRENNOM (713-502-4370)
Personal property appraisals.

Image credit:  paulbr75