It would be nice to say that he’ll take us at our word, but he doesn’t.
We generally list your car value according to either a Kelley Blue Book (private party value or trade-in value) value or according to a NADA Guide (average trade-in value). However, at the 341 Meeting of Creditors, the trustee will ask us what we honestly think the car is worth. If your car needs work, we try to list that in your Schedule B Personal Property in the bankruptcy.
For instance, we may list a 2001 Ford Escort as having a value of $440 for an average trade-in value according to the NADA. However, the clean retail value is $2,190. So, we would list the 2001 Escort as follows:
2001 Ford Escort …. value $400
(230,000 miles, needs work including body damage and new front windshield).
Exemption claimed…. $3,000
However, if the trustee objects to our value, he can order us to take the vehicle to an appraiser to get a fair appraisal. Here in Utah, the bankruptcy trustees generally use Erkelens & Olson to value vehicles. If we are really worried about the value of the car, we can even send you to the auctioneer prior to filing the bk, and he will eyeball it and give you a fair estimate, even a written estimate, for free. At the 341 Meeting, we can show that appraisal to the trustee.
If the car is worth more than the exemption limit ($3,000 in Utah), the trustee can order you to turn over the vehicle to the auctioneer, and the auctioneer will sell it. He will pay you the first $3,000, and the rest will go to the bankruptcy trustee. We can also offer to pay the trustee the nonexempt portion of the vehicle (the amount over $3,000 of equity) and keep the vehicle.
So basically, we list the Kelley Blue Book or NADA value and hope that’s enough. If not, the trustee will use an auctioneer to determine value.