Sunday, September 11, 2011
Orlando Division Automobile Valuations in Chapter 7 Become Stricter
An automobile valuation in a Chapter 7 bankruptcy often ends up being determined by a judge in the Middle District of Florida, however, different divisions within the district may rule differently on how valuations are determined. In the Jacksonville division, bringing in an expert to testify can be very helpful in presenting information to the Judge to assist him in arriving at a property value. Why is the value important? It can determine how much one will have to pay to keep their nonexempt asset, that is, how much they will have to pay to their bankruptcy estate to be able to keep their car.
It has recently been reported through another attorney's blog that at least one judge in the Orlando Division of the Middle District of Florida is arrived at a formula in determining what the market value of a automobile is. Historically, they have been accepting CarMax appraisals, which were lower than NADA or Blue Book. All parties, including the Trustee, accepted the values from CarMax because it was assumed the values were based on arms-length transactions, and were true indicators of value. Also, in instances where the Trustee auctioned a vehicle, they were unable to get NADA values at the sale.
It was reported in the post that recently the Court valued an automobile according to the average of trade-in and retail sales value. This was the apparent result of the Court believing the CarMax values were trade-in values, and ignored actual sales values. In the Orlando Division, this is creating to stricter approach to determining values of automobiles. We will have to wait and see if this trend is adopted by the other courts within the district.