Under the BAPCPA (“Bankruptcy Abuse Prevention and Consumer Protection Act”) debtors are required to state the value of their assets at their replacement cost. When debtors file for bankruptcy, their bankruptcy attorney gives them a disclosure that says something along the lines of the following:
You must determine how much your personal property is worth as it is today. Do not value your property based upon what you can sell it for. Instead, value it at what you would have to pay to replace it. If your property is new or close to new, consider retail value adjusted to whatever extent appropriate for the amount the property has been used. If there is a market for your property as used, you may use that market to determine value. For example, you may consider using thrift store prices or prices at house or garage sales or at a secondary marketplace such as eBay to determine what it would cost you to replace your personal property.
Debtors filing bankruptcy should not simply guess what they could sell their assets for; they must guess or estimate what it would cost for them to replace the item. Many bankruptcy attorneys suggest that the debtor find out how much it would cost to buy the same item either new or at a retail establishment that sells used items. The figure they discover once they do their research is only a marker and should be inflated a bit to avoid having problems with their bankruptcy discharge in the future if the valuation if off a bit. While it is okay to value the property a little high, it can be a death kiss for your bankruptcy case if it is found that you valued property in the bankruptcy significantly less than what if would cost to replace it.