How does the government determine what you have of value when filing bankruptcy?

A relative is thinking of filing Chapter 7 bankruptcy. I have read in many sources that the government may sell some of your belongings in this case. I was wondering (from people who know, not from people whom are just guessing) how that process goes down?

If you have been through this before, it would be most appreciated if you noted whether it was before or after they reformed the bankruptcy laws a few years ago.

They don't really worry about the value of the items. They sell off everything to the highest bidder. Your relative gets to keep 1 bed, 1 tv, 1 table, 1 sofa. The rest is sold. Go to a sale held by the Trustee of the Bankruptcy Court to see how it is done..

Initially, it is up to the debtors to list their assets and their opinion of value of the assets. The court appoints an administrator called a trustee to review the case and determine if there are any assets of value to sell for the benefit of creditors.

The trustee may used several methods to value and asset. Sometimes they have professional auctioneers who conducts thousands of auctions to give them an opinion. For cars, they might use Kelly Blue Book. For real estate, they might use a real estate appraisers. Sometimes, they even use Craigslist or just rely on the debtor's word.

Your relative should contact a member of the National Association of Consumer Bankruptcy Attorneys for a consultation.

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html

This site tells you all about the Chapter 7 bankruptcy.