Thursday, August 18, 2005

Valuation, section 506

For some time now we have consistantly valued items securing debt by two different means. In chapter 7 cases we normally use liquidation or wholesale values. In chapter 13 cases we use fair market value for the age and condition. This is all about to change. Section 506(a)(2) now states that all personal property securing an allowed claim must be valued at, "replacement value". This is defined as "the price a retail merchant would charge for property of that kind considering the age and condition..." Ok, what does that mean? If a debtor purchased a bedroom suite 2 years ago from a retailer, how are we to determine its current value? There is no used furniture blue book. Who retails used tv's, vcr's, furniture, etc? Is Goodwill a retail merchant? Or a local pawn shop? Perhaps we can look to closed ebay auctions? If anyone has a better idea, I would love to hear it.

Wednesday, August 17, 2005

Bankruptcy Reform

60 days and counting to implimentation, are you ready?