One of the questions I hear from clients when we are preparing a bankruptcy petition is, “How am I supposed to know what my stuff is worth?”

It is a fair question. Most people have never had to put a value on everything they own. You may know what you paid for your television, your furniture, or your vehicle, but that does not necessarily tell you what those items are worth today. And if you own a home, have retirement accounts, or have been investing in stocks, determining the appropriate value can require a little more work.

After 35 years of practicing bankruptcy law and representing more than 25,000 people, I can tell you that valuing assets is an important part of preparing a bankruptcy case. The good news is that you generally do not need to hire an appraiser to value every item you own. You do, however, need to make a reasonable effort to determine the value of your property and disclose everything you own.

Let me explain how this works.

1. What Is an Asset in Bankruptcy?

An asset is property or something of value that you own or have a legal or equitable interest in. When you file bankruptcy, you must disclose your assets on your bankruptcy petition and related schedules, whether you file Chapter 7 or Chapter 13.

People sometimes assume that assets are limited to their house, car, and bank account. That is not the case.

Assets can include:

• Real estate: Your house, vacant land, rental properties, cottages, and other real property interests.
• Vehicles and recreational equipment: Cars, trucks, motorcycles, boats, RVs, trailers, and other vehicles.
• Bank accounts: Checking accounts, savings accounts, certificates of deposit, and money held in other financial accounts.
• Investments: Stocks, bonds, mutual funds, brokerage accounts, and cryptocurrency.
• Retirement accounts: 401(k) plans, IRAs, pensions, and other retirement benefits, where applicable.
• Household goods and furnishings: Furniture, appliances, televisions, computers, and other electronics.
• Personal property: Clothing, jewelry, watches, collectibles, tools, sporting goods, firearms, and other belongings.
• Business interests: Ownership interests in an LLC, corporation, partnership, or sole proprietorship.
• Money owed to you: Certain tax refunds, unpaid wages, accounts receivable, loans you made to other people, and other rights to receive money.
• Other rights and interests: Inheritances, pending lawsuits, potential legal claims, and certain interests in trusts or estates.

This list is not exhaustive. Even an asset that you believe is worthless, difficult to sell, or of little practical use may need to be disclosed.

For example, if you own an older boat that has not run in three years, that does not mean you can leave it off your bankruptcy paperwork. The same is true of a timeshare, an interest in a family business, or a potential claim against someone who owes you money.

The general rule is simple: disclose the asset and let your bankruptcy attorney determine how it should be treated. Do not decide on your own that something is too small, too old, or too unimportant to list.

2. Remember That Your Bankruptcy Petition Is Signed Under Penalty of Perjury

This is an important point that I emphasize with every client.

Whether you file Chapter 7 or Chapter 13, your bankruptcy petition and schedules are signed under penalty of perjury. You are representing that the information you provide about your financial affairs, including your assets and their values, is truthful and complete to the best of your knowledge.

Bankruptcy is not the time to guess carelessly, leave out property because you think nobody will find out about it, or intentionally undervalue something to make your financial situation look better.

At the same time, the law does not expect you to know the exact price that every item would bring in a sale. Many personal belongings have no readily available market price, and reasonable people can disagree about their value.

What matters is making an honest, good-faith effort to arrive at a reasonable value, providing complete information to your attorney, and updating the information when necessary.

If you are unsure how to value an item, tell your attorney. That is what we are here for.

3. How Do I Value My House or Other Real Estate?

Real estate is often one of the most significant assets in a bankruptcy case, so it deserves special attention.

Fortunately, there are several online resources that can help you estimate the value of your property.

Zillow and Realtor.com

Websites such as Zillow and Realtor.com can provide estimated values for residential real estate. They may also show recent sales of comparable properties in your neighborhood.

These estimates are useful starting points. You can enter your address, review the estimated value, and compare your home with similar properties that have recently sold.

However, I caution clients not to assume that an online estimate is automatically accurate.

An automated valuation may not account for important details, including:

• The actual condition of your home.
• Needed repairs, an older roof, or an outdated kitchen.
• Improvements or renovations that may increase value.
• The size, condition, and features of your property relative to nearby homes.
• Unique features, acreage, outbuildings, or waterfront access.
• Recent changes in the local real estate market.

For example, an online website might estimate that your home is worth $350,000. But if the property needs $40,000 in repairs, or if nearby homes have been selling for considerably less, that estimate may not tell the whole story.

The reverse can also be true. A website might undervalue a property that has been extensively renovated or has features that automated valuation systems do not adequately recognize.

My advice is to use these websites as a guide, not as the final word.

When should I obtain a broker’s price opinion or an appraisal?

If the value of your home is uncertain and the difference could materially affect your bankruptcy case, it may be appropriate to obtain a broker’s price opinion, commonly called a BPO, or a formal appraisal.

A BPO generally provides an estimate of a property’s likely market value prepared by a real estate professional. A formal appraisal involves a more structured valuation by a qualified appraiser.

Whether either is necessary depends on the circumstances. If the online estimates are reasonably consistent with other evidence and the equity is not in question, an additional valuation may not be worth the expense. If the property is unusual, the estimates vary widely, or the amount of equity could determine whether an asset is at risk in a Chapter 7 case, a more reliable valuation may be important.

Remember, the value of your real estate is only part of the equation. We also need to consider the mortgages, liens, ownership interests, and applicable exemptions when evaluating the equity in the property.

That is particularly important in Michigan, where the available bankruptcy exemptions can affect how much equity a debtor may protect.

4. How Do I Value Household Goods, Furniture, Electronics, and Clothing?

This is where people frequently make mistakes.

When I ask a client what their furniture is worth, they sometimes tell me what they paid for it. That is understandable, but it is usually not the right approach.

If you purchased a living room set for $4,000 five years ago, that does not mean it is worth $4,000 today. The same applies to televisions, computers, appliances, clothing, and most other used household possessions.

For bankruptcy purposes, a useful starting point is to consider what the item would reasonably sell for in its current condition, rather than what you originally paid for it.

Think about an auction or Facebook Marketplace

For ordinary household belongings, consider what you could realistically expect to receive if you sold the item on Facebook Marketplace or at a local auction.

Ask yourself:

• Is the item new, nearly new, or several years old?
• Is it in excellent condition, average condition, or poor condition?
• Is it a common item that is readily available used?
• Would someone actually pay money for it?
• What are similar items selling for in your area?

A five-year-old television that originally cost $1,500 might realistically sell for only a small fraction of its original price. Used clothing generally has limited resale value, unless it includes desirable designer items, collectibles, or other items with a specialized market.

On the other hand, certain furniture, jewelry, antiques, artwork, tools, and collectibles can retain substantial value.

You do not need to spend hours researching every plate, towel, or inexpensive kitchen appliance. Use reasonable estimates for ordinary belongings and devote more attention to items that could have meaningful resale value.

One additional point: do not assume that an item is worthless simply because you would prefer not to sell it or because you have sentimental attachment to it. Sentimental value and resale value are two different things.

5. How Do I Value My Vehicles?

Vehicles deserve separate consideration because they can have significant value, and their equity may affect your bankruptcy options.

For a car or truck, online valuation tools can be helpful. Resources such as Kelley Blue Book and Edmunds can provide estimates based on the vehicle’s year, make, model, mileage, condition, and equipment.

When determining the value of your vehicle, consider:

• The exact year, make, and model.
• Mileage.
• Overall mechanical and cosmetic condition.
• Accident history or significant damage.
• Optional equipment and trim level.
• Local market conditions.
• Whether the vehicle has unusually high or low mileage.

A vehicle’s value is not necessarily what a dealership would charge for it on a used-car lot. Nor is it necessarily what you owe on the loan.

For example, suppose your vehicle could reasonably sell for $18,000, but you owe $12,000 on the loan. The vehicle’s estimated equity is $6,000 before considering other relevant liens, ownership interests, and applicable exemptions.

If you own the vehicle outright, the starting point is its current value, not the amount you originally paid for it.

I also recommend being realistic about condition. If your truck has substantial mechanical problems, a valuation based on a comparable truck in excellent condition may not be appropriate.

Conversely, do not automatically assume that a vehicle with high mileage has little value. Some trucks and specialty vehicles can retain considerable resale value.

As with real estate, the purpose is to arrive at a reasonable, supportable estimate. Your bankruptcy attorney can help determine whether additional documentation or a more specialized valuation is appropriate.

6. Bank Accounts, Brokerage Accounts, and Retirement Accounts Are Usually Easier to Value

Some assets are much more straightforward.

Bank accounts

Your checking and savings account balances can generally be determined from recent bank statements or online account records. We also need to account for relevant deposits, withdrawals, and the actual balance as of the applicable bankruptcy filing date.

Do not forget accounts at online banks, credit unions, or financial institutions you rarely use.

Brokerage accounts and investments

Stocks, mutual funds, exchange-traded funds, and other publicly traded investments can generally be valued using the account statement or market value on the relevant date.

If you own individual stocks, for example, the value is generally based on the number of shares you own and the applicable market price. Investments that are difficult to sell, privately held, or otherwise unusual may require a different approach.

Retirement accounts

Retirement accounts, including 401(k)s and IRAs, can usually be valued using recent statements or account information from the plan administrator or financial institution.

Do not assume that a retirement account can be omitted simply because it may be exempt under applicable law. Disclosure and exemption are separate issues. The account may need to be listed even when the funds are protected.

The same principle applies to other financial assets: tell your attorney about the account, provide the records, and allow the appropriate legal analysis to determine how it should be treated.

7. What About Jewelry, Collectibles, Tools, and Other Valuable Personal Property?

Certain items deserve more attention than ordinary household goods because they may have a meaningful resale value.

Examples include:

• Gold, diamond, and other valuable jewelry.
• Antique furniture and artwork.
• Coins, stamps, and collectible memorabilia.
• High-end watches and designer accessories.
• Professional tools and specialized equipment.
• Boats, recreational vehicles, and other specialty property.
• Valuable firearms and sporting equipment.
• Ownership interests in a business.

For these items, online asking prices can be misleading. Someone listing a used watch for $5,000 does not establish that the watch will sell for that amount.

Where practical, look for completed sales of comparable items, rather than relying solely on asking prices. For specialized property, a knowledgeable dealer, auction house, or appraiser may be able to provide a more reliable estimate.

If you own a business, the valuation can become more complicated. The value of your ownership interest may depend on the business’s assets, liabilities, income, marketability, and the nature of your ownership rights. Do not simply assume that an LLC interest is worth nothing because the business does not have much cash in its bank account.

8. Why Does Asset Valuation Matter in Chapter 7 and Chapter 13?

Valuing assets is not just a paperwork exercise. It can have real consequences for your bankruptcy case.

Chapter 7 bankruptcy

In Chapter 7, the trustee generally evaluates the debtor’s assets to determine whether there is nonexempt property that may be administered for the benefit of creditors.

That does not mean you automatically lose your property when you file bankruptcy. Applicable exemptions can protect many assets, and the outcome depends on the property, its value, the relevant liens, the exemptions available, and the circumstances of the case.

But accurate values are important. If a home, vehicle, or other asset has more equity than expected, the difference could affect the analysis of whether the asset is fully protected.

Undervaluing property can create problems. Overvaluing property can also make it more difficult to understand your financial position and evaluate your options.

Chapter 13 bankruptcy

Chapter 13 also requires full disclosure of your assets and liabilities. Asset values may be relevant to the treatment of creditors, the applicable plan requirements, and the amount that must be paid through the plan in certain circumstances.

For example, the value of nonexempt property can be relevant to the amount unsecured creditors must receive under the Chapter 13 plan. The specific calculation depends on the applicable bankruptcy rules and the facts of the case.

This is one reason it is important to have accurate information before filing. A reasonable valuation helps your attorney evaluate the available options and develop an appropriate strategy.

9. Do Not Confuse an Asset’s Value With the Equity You Have in It

This is an important distinction.

The value of an asset is not always the same as the equity you own in that asset.

Suppose your home is worth $300,000 and you have a mortgage balance of $240,000. The starting point for calculating your equity is approximately $60,000, before considering other liens, ownership interests, transaction costs where relevant, and the applicable legal analysis.

Similarly, if your vehicle is worth $15,000 and you owe $10,000 on the loan, the starting point for your equity calculation is approximately $5,000.

But do not subtract your debts from every asset and report only the difference. The bankruptcy schedules generally require you to disclose the asset’s value and separately disclose the relevant secured debt. Your attorney will determine how those figures affect your case.

Also, do not assume that a lien or loan means an asset does not have to be listed. It generally still must be disclosed.

10. My Advice: Be Honest, Be Reasonable, and Do Not Overthink It

I understand why people worry about getting asset values exactly right. They do not want to make a mistake on a document that is signed under penalty of perjury.

The answer is not to panic or to hire an appraiser to inspect every possession in your home. It is to make a reasonable effort, use reliable information where it is available, and ask questions when something is unclear.

For most cases, a practical approach looks like this:

1. Make a complete list of what you own. Include property you own jointly, property held in someone else’s name in which you have an interest, and assets that are not physically in your possession.
2. Gather financial records. Collect bank statements, investment statements, retirement account statements, vehicle loan information, and other relevant documents.
3. Use online valuation tools as a starting point. Websites can be helpful for homes, cars, and certain other assets, but do not treat an automated estimate as infallible.
4. Estimate used personal property realistically. Consider current resale value rather than original purchase price.
5. Identify unusual or valuable items. Tell your attorney about jewelry, collectibles, business interests, real estate with uncertain value, and anything else that may warrant a closer look.
6. Disclose anything you are unsure about. If you do not know whether something qualifies as an asset, let your attorney decide how it should be reported.
7. Update your information when necessary. If you discover an omitted asset or realize that a material valuation is inaccurate, tell your attorney promptly.

After more than 35 years in bankruptcy practice, I have learned that the best cases begin with complete and accurate information. You do not have to be an appraiser, an accountant, or a financial expert to file bankruptcy. You do have to be candid about what you own.

If you are considering Chapter 7 or Chapter 13 bankruptcy in Michigan and are concerned about the value of your assets, I can help you work through the process. We can review what you own, determine which values need additional support, and evaluate how the applicable exemptions and bankruptcy rules may affect your situation.

The most important thing to remember is this: disclose everything, use reasonable values, and do not try to solve every valuation question on your own before speaking with a bankruptcy attorney.