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How does a bankruptcy debtor accurately calculate the value of their home? If you own real estate, you will be asked by your lawyer to estimate a value - and you need to be as accurate as possible.

In many situations, a lawyer will recommend, to their clients, that they contact a local real estate appraiser to request a “drive by” appraisal and in most cases a full appraisal of their property is recommended. A full home appraisal provides reliable information to help you discover the value of your home

Significant discrepancies in the value of a home can create problems in bankruptcy. If a value listed is too low, the client runs the risk of a trustee objecting to their scheduled valuation and asking the Court for permission to seize the home. In addition an obvious under-value will call a client's honesty, truthfulness and credibility into question in future dealings with the Bankruptcy Judge, trustee and opposing counsel. If a value listed is too high, a client may miss out on the availability of Chapter 7 or pay back more than is necessary in a Chapter 13.

Real estate appraisers perform an integral function in the bankruptcy process. Appraisers typically estimate asset collateral values of secured creditors and debtor-in-possession (DIP) financings; help to identify and value sale/leaseback, spin-offs, licensing and other reorganization opportunities; and are often involved in structuring and valuing restructured debt and equity instruments and in assessing/opining on the fairness of proposed reorganization plans.

For these reasons, bankruptcy professionals frequently need to hire, work with and rely on valuation analysts/appraisers. It is important for bankruptcy professionals to be aware of the various membership associations that train and accredit appraisers. One of these organizations is the Appraisal Institute (AI).

Do you have an appraisal question?

We can help. Simply call 732-906-2202 or Fill out the form below and we will contact you with an answer inmediately. This is a FREE consultation with absolutely no obligation to you. We guarantee your privacy.