When an individual files bankruptcy, there is often a dispute between the debtor and his creditors as to how much money the debtor actually has available to pay off his obligations. In these situations, a bankruptcy court (or the individual debtor) may implement a valuation service to determine the worth of assets from an objective point of view.
Valuations can be used to determine the value of a creditor’s secured claim, to evaluate offers for property sold, or to make adequate disclosures in a reorganization plan. It can also help determine whether a creditor’s claim is secured and the current value of a debtor’s assets. Traditionally, bankruptcy law holds that the value of something changes with its purpose or use, so timing of a valuation service is key.
In terms of businesses that file for bankruptcy, valuation services can determine the value for the business as a whole, as well as the value of tangible (machinery, land, buildings, etc.) and intangible (trade names, designs, patents, etc.) assets.
It is often wise to consult a valuation service on your own, because it can be cheaper and easier than a court-ordered valuation. Call Dailey Law Offices today to discuss valuation services and other bankruptcy needs.