One of the things that the trustee may ask is how you arrived at the value you used in the petition for your home or vehicle. The value of your assets might have a significant impact on the contours of your bankruptcy, including the exemption scheme under which you choose to file. For instance suppose you have a home that secures a $200,000 note and that you are entitled to a $75,000 exemption. If the fair market value of the house is $250,000 your exemption covers your equity. If the fair market value of the house is $350,000 you may need to file a chapter 13 to hang onto the house because a portion of the equity is not exempt. If there is not a reasonable basis that you can articulate to the trustee as to how you arrived at the fair market value, it may raise questions for him or her as to the soundness of the petition overall.
While you do not need to pay for an appraisal for this purpose, there must be some basis of the estimate. Often, real estate agents are happy to give a ballpark estimate. I had a client recently who went around the neighborhood and looked at houses for sale, called all the realtors, got an idea of the size and the condition of the other houses and valued her house based on that. The trustee accepted that as a reasonable basis for valuing the house.
It’s a matter of being aware of where the hot spots are and knowing the process by which to get a reasonable answer for the situation.
What Happens After the Meeting is Over?
What happens afterwards is about 60 days after your meeting of creditors, you get a letter that says, “All your dischargeable debts are discharged”. But the letter does not specify which debts are dischargeable and which aren’t. As not all debts are dischargeable, before you filed the bankruptcy petition you or your attorney analyzed which of your debts were dischargeable and which were not. Very generally, credit cards debts and medical bills are dischargeable and debts to government agencies and debts incurred by fraud are not. And that is your discharge. If you have completed your financial management course and there are no pending issues, your case will be closed.
For more information on Miscommunication between Participants at a 341 meeting a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (510) 594-2551 today.