Today we'll continue our discussion of exemptions and examine how property is valued for the purpose of claiming exemptions.
While states have different exemption schemes, the kind of property that can be claimed as exempt is fairly uniform. The difference lies primarily in the amount you can assign to a particular item of property. For example, states allow debtors to claim as exempt equity in a vehicle up to a certain amount. This amount ranges from $1000 to $5000 depending on the state.
As a general rule, states provide exemption categories for the following property: equity in a home, equity in a vehicle, basic clothing, furniture, kitchen appliances, personal items, and tools of a trade. (This is not a complete list.) In addition, some states have what is known as a wildcard exemption. This is a specific amount you can apply to property that ordinarily could not be claimed as exempt.
The main issue facing people filing for bankruptcy is how to assign value to an item of property. What exactly is a fair estimate? In the past, states were a little more lenient in terms of assigning a value to goods. You could typically assign the amount that you'd receive at a garage sale. Under the new bankruptcy law, however, the standard has been raised somewhat. Now, you must value an item at the cost a retail vendor would charge (taking into account the condition of the property). In this context, eBay provides a good guide: check on this site to see how much a similar item is going for.
Tomorrow we'll look at the kind of property that usually cannot be claimed as exempt.
