Exempt Equity Value Appraisals For Bankruptcy Exemptions

The proper appraisal method for allocation of bankruptcy exemption values is based on liquidation. The highest value obtainable by a professional seller is not applicable, nor is the wholesale value. Trustees must incur costs for administration, appraisal, auction sale, accounting and reporting results to the court. Attorney fee rates are charged. These costs are deducted from proceeds, so that the net funds available after liquidation through auction determine the potential for distribution to creditors. If the net distribution is nominal, trustees routinely abandon assets and allow debtors to retain property.