A bankruptcy appraisal gives a complete picture of your debts, financial obligations and income. It is normally used whenever an individual is filing or thinks about filing for bankruptcy. Under the federal bankruptcy laws, a bankruptcy appraisal will be required by the bankruptcy court and a bankruptcy judge will carefully consider the appraisal in determining whether or not to discharge the debts of the applicant under Chapter 7 or approve a debt repayment plan as outlined in Chapter 13.
The appraised property
In bankruptcy evaluation, all assets owned by the debtor will be carefully considered and these include personal property as well as real estate for both chapter 7 and chapter 13 bankruptcies. If you are considering a bankruptcy appraisal, it is highly recommended that you have the appraisal done by a company or an individual well versed and well experienced with bankruptcy appraisals. This is because the bankruptcy judges will look at both the valuations as well as the underlying factual analysis which formed the basis of the evaluations. An ideal bankruptcy appraisal must be defensible, easy to understand and must also be very convincing to the judges.
Why Bankruptcy Appraisal
There are two main applications of these appraisals in a bankruptcy court. The first reason is that the court needs the appraisals to evaluate if the debtor has certain properties which can be exempted from the claims by the creditors. In most of the cases, the debtor’s house and other properties like the car will be exempted from claim by the creditors.
Secondly, it is through the bankruptcy appraisal that the court will determine whether or not the debtor has enough assets to pay his debts. If the assets are sufficient to pay off the debts, then it is highly likely that the petition will not be granted and the debtor may be subjected to Chapter 13 bankruptcy to establish a repayment plan to clear off the debts.
What to do for a bankruptcy appraisal
Before filing for bankruptcy, you need to test the waters first to know if you will succeed in getting your debts discharged or get a repayment plan under Chapter 13 bankruptcy. It is imperative to work with a competent and qualified bankruptcy appraiser and you should not try to on the appraisal when filing for bankruptcy. If the appraisal doesn’t look professional or if it appears to be slanted to favor you, then you may not find the favor you are looking for in court.