The value of property that an individual filing Chapter 7 is
allowed to keep is determined by exemption laws. Exemption laws vary from state-to-state.
In determining whether a debtor has assets that exceed their exemptions, one must first
consider the “liquidation value” of the debtor’s property. For real estate,
this is the amount that a potential buyer would pay in the current market for the property in its
present condition (without repairs), less the costs associated with selling the property. For
vehicles, this is “as-is” auction value. For furniture, clothing, and other household
items, this value is the amount the items in “as-is” condition would be worth at a yard
sale. If any property is collateral for a loan, the balance owing on the loan or loans is
subtracted. Liquidation value is the value that remains. If an asset has any positive
liquidation value, that dollar amount must be exempted under the applicable state exemption
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