Changing Your Car Value After Filing Bankruptcy

Bankruptcy debtors are bound by the information on their bankruptcy petition, and debtors should not assume they can edit financial information to protect assets after the bankruptcy trustee requires the assets to be turned over.

In two meetings with Chapter 7 bankruptcy trustees in the past month my clients had non-exempt equity in automobiles. When the trustee explained to my clients that would be required to either buy-back the equity or turn over the cars to be sold at auction the clients objected to the amount of equity. They told the trustee that their cars were not worth as much money as stated on their bankruptcy petitions. One client stated he had looked in the wrong valuation book for value, and the other client stated that he had neglected to discount the car value for needed repairs.

In both instances, the trustee said that the client was stuck with the car valuation on the petition. The trustee did not listen to post-filing amendments of the debtor’s own asset valuations. The lesson is that debtor’s must thoroughly investigate the true value of their vehicles and other asset before they sign their petition. Debtors cannot rely upon their bankruptcy attorney or the bankruptcy trustee to correct the valuation of assets.

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