In this interesting post, M. Jonathan Hayes addresses the problem of valuing businesses that really have no value.
I am listing the assets on schedule B at a value of zero but the exmeptions on schedule C as the full amount of the wildcard, roughly $23,000. So schedule C says, "Asset - interest in partnership - value zero. Amount claimed exempt - $23,000." I expect to get some guff from the trustee who will say there must be some value if we are exempting it and if no value, the exemption should be zero. I will point to Schwab and I am sure I am right.
He's talking about the case of Schwab v. Reilly, in which the Supreme Court held (PDF) that a trustee can object to a debtor's valuation of property ever after the 30-day period to object has run.
So, how can you have a $23,000 exemption on a property that you claim has no value? Well, under Schwab if you claim no exemption (since no value) and the trustee then values the property at greater than 0, you have waived your exemption. If you list the property at $23,000, you unnecessarily spark the trustee's interest.
Listing any amount, $5,000 - 10,000, 20,000 - gives the appearance that some process was used to value the asset when each of the numbers is a guess - and where "zero" is a firm belief ... The message the schedules send is important. A business valued by the debtor at $20,000 is worth looking into. A business valued at zero is usually not. Given Schwab, the asset should nevertheless be exempted to the maximum.
