How to Value Your Vehicle for Bankruptcy Purposes
Attorney Rachel Foley has written a very helpful article in the Bankruptcy Law Network blog about how to determine your vehicle's value for bankruptcy purposes. I agree wholeheartedly with her recommendation that you take your vehicle to CarMax for a written valuation.
Generally, for bankruptcy purposes, you will want some written evidence of vehicle valuation. Guessing is dangerous and NADA or Kelly Blue Book describe similar cars. Often NADA or Kelly Blue Book valuations will be higher than CarMax. If you are a bankruptcy setting, you want the lowest reasonable valuation for your vehicle to minimize your equity position.
A CarMax valuation represents a bona fide offer to purchase your car or truck. Like Rachel, I advise all of my clients to take their vehicles to CarMax to obtain a written purchase offer.
My experience as well as what I hear from my clients has been that the staff at CarMax is professional and not high pressure. There is, of course, no obligation to sell your car if you ask for an offer. CarMax is unique in that their offer to buy your car is not conditioned on any requirement to buy a car from them. In other words, you can sell them your car for cash, without linking your sale to any other transaction with CarMax.
If you do decide to sell your vehicle to CarMax, it might be worth a call to your bankruptcy lawyer first. Generally a transfer of property to a 3rd party purchaser will not be a problem in bankruptcy, however, your purchase of a replacement vehicle might be an issue as would the question of what you did with the sale proceeds.
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Jonathan Ginsberg
Comments on How to Value Your Vehicle for Bankruptcy Purposes
I have two friend's cars in my name because when they each got there income tax refunds this year they both purchased vehicles from private owners, but both had issues and/or no drivers license at the time they purchased so they could not title the vehicles in their own name. i am doing this favor for just a month or two until they finish paying off their fines and reinstatment fees or whatever. but i am planning to file bankruptcy and my attorney is telling me this is going to be a problem if i transfer their vehicles out of my name to someone else to prevent the trustee from trying to take my friends' cars. but the truth is these cars really do not belong to me so what should i do in this situation. should i wait until 3 or 4 months after transfering titles or will it still be a problem or what can they really do to me if i transfer titles this week and file bankruptcy next week? i need to hurry up and file because on of my creditors wants to garnish my wages for $5K and i can not afford that.
please help