When you file for Chapter 7 or Chapter 13 bankruptcy, you must report the value of personal property you own, which includes household items. With Chapter 7, the bankruptcy trustee can sell your household items to pay unsecured creditors. With Chapter 13, the calculation of your household property is used to determine how much you will pay unsecured creditors in your bankruptcy plan. Federal and state laws determine which household property is exempt and, therefore, not subject to being used in your bankruptcy case.
List the household items you own on a blank piece of paper. Household items may include appliances, which are exempt, and other items, such as furniture, artwork and clothing. List every household item even if you know that it is exempt. An exemption allows you to excuse the property from bankruptcy up to a certain dollar amount. Do not include property that you possess but do not own. Make sure you list property that you own even if you do not have possession of it.
Assess the condition of your household property. Look closely at the condition of the property and determine whether it is in good condition, average condition or poor condition. In bankruptcy, the value of the property is equivalent to its replacement value, which is how much you would pay for a similar item in similar condition.
Determine the value of the property. You will need to determine how much the property is worth in the current market. You can refer to online sources that specialize in selling used products or local advertisements. It is not necessary to come up with an exact figure, but the amount should be as precise as possible. The bankruptcy court will accept your estimation unless the bankruptcy trustee disputes the amount.
Compete Schedules B or C. Both schedules are official forms that you must use to list your exempt and nonexempt property. On Schedule B, list nonexempt personal property and the current value of your interest in each item. Use Schedule C to list exempt property, the claimed exemption amount, the current value of the property and the specific law that provides the exemption. You will file Schedules B and C with the local clerk of the bankruptcy court.
- Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time; Stephen Elias & Robin Leonard; 2008
- How to File for Chapter 7 Bankruptcy; Stephen Elias, Albin Renauer & Robin Leonard; 2007