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Should I get a business appraisal if I am filing bankruptcy?

The answer is “yes” if you own a business.  Large or small, you need to know what it is worth.  There are two kinds of bankruptcy in this regard, one is personal and the other is business only.  Ask Donald Trump.  He used the bankruptcy laws to his advantage several times, but he personally has never been bankrupt.

In other words, you can declare a business bankrupt that you own or it can happen “TO” you if you are a part owner of a business that files for bankruptcy.

If you declare personal bankruptcy, everything you own, including any business interests get sucked in.  You need to know what they are worth and so does the Court.  Do no rely on an amateur and do not go the cheapest cost on the Internet.

The Court won’t approve of it unless it is “certified” by a professional and using professional standards of practice.  This includes USPAP.

A Certified Business Valuation is the most important thing, besides a good lawyer, to keep from getting hosed.

If you are filing personal bankruptcy and have at least $20,000 in household goods, just like in Divorce Court, you should have a third party, independent appraisal of the assets.  And if you have a business, even as small as a multi-level business just making a few thousand dollars a month or a year, this tool will pay off in the end.

If your business is larger, say $100,000 to $1,000,000 in revenues or assets, an Certified Business Valuation Appraisal is a M*U*S*T !!!

What does it cost?  Well, the good news is that the costs are generally deductible from the bankruptcy proceedings. In other words, money that you were never going to see again anyway (going to lawyers and creditors) pays for it or reimburses you for the cost.

On the low side $1,500.00.   Generally $2,500.00 at least if you have assets worth $25,000 to $50,000 or more.

If your company employs between 1 and 5 plus yourself, it is probably more complex and the costs are $2,500 to $7,500.

If your company has over $500,000 in assets or in annual revenues, $7,500 to $10,000 is a typical range.  Remember, these are just ranges.  Each situation is different.  Hopefully this guidance will save your 3 to 10 times the cost of the appraisal as you come out of the bankruptcy court process.

Bottom Line: Don’t get hammered. Get a Certified Business Appraisal.

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