Bankruptcy Appraisals

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A bankruptcy real estate appraisal is a professional opinion of the fair market value of real property that is prepared specifically for use in a bankruptcy case and in compliance with bankruptcy court requirements.

What it’s used for?

In a bankruptcy proceeding, the court, trustee, creditors, and debtor all need a reliable value of the property to make decisions about:

• Equity in the property
• Exemptions the debtor may claim
• Adequate protection for secured creditors
• Reaffirmation, redemption, or surrender of property
• Sale of property by a trustee (especially in Chapter 7)
• Plan confirmation in Chapter 11 or Chapter 13

How it differs from a regular appraisal

A bankruptcy appraisal is more formal and court-oriented than a typical lending or listing appraisal:

• Prepared by a state-licensed or certified appraiser
• Complies with USPAP (Uniform Standards of Professional Appraisal Practice)
• Written with the expectation that it may be filed with the court or testified to
• Often includes clear assumptions, limiting conditions, and exposure time
• Emphasizes current fair market value, not replacement cost or insured value

Typical contents

A bankruptcy real estate appraisal usually includes:

• Property description and legal identification
• Neighborhood and market analysis
• Highest and best use analysis
• Comparable sales (and sometimes income analysis)
• Reconciliation of value
• Appraiser’s certification and qualifications
• Effective date of value (often the petition date or a court-specified date)

Who orders it?

• Debtors or their attorneys
• Bankruptcy trustees
• Secured lenders or creditors

Why accuracy matters?

Because bankruptcy cases involve competing interests, an unsupported or informal value (like a Zillow estimate or broker price opinion) often carries little weight. A proper appraisal as performed by NJ Property Appraisals will provide credible, defensible evidence if the value is disputed. 

If you have additional questions or would like to order your bankruptcy appraisal please fill out the form below or simply give us a call today at (856) 745-3550.