§ 76.6     Valuation after Rash
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 76.6, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

If certainty is the measure of success, Associates Commercial Corp. v. Rash1 quickly failed as a resolution of the valuation debate that raged before. As one Texas bankruptcy court summed it up:

[T]he Supreme Court’s Rash opinion really brings nothing new to the table. . . . [R]eplacement value, as explained by the Supreme Court, is not something that can be defined in and of itself. Indeed, the Supreme Court points out that in any particular case replacement value may be retail value, wholesale value, or some other value.2
[2]

Prior to Rash, the reported decisions on valuation at confirmation in Chapter 13 cases used bewildering terminology and methodologies, including replacement value, retail value, wholesale value, fair market value and adjustments to each of the above.3 In Rash, the Supreme Court reduced it all to “replacement value” but left the meaning of replacement value to the facts of individual cases with many relevant variables and adjustments.4 Not surprisingly, the valuation decisions reported since Rash read suspiciously like the pre-Rash cases, only the words “replacement value” have been substituted for the various starting points used by the courts before Rash. The outcomes in the reported decisions are not demonstrably different than before Rash.

[3]

Several courts purporting to apply Rash have concluded that retail value is the starting point for valuing personal property at confirmation in Chapter 13 cases.5 Many of these cases lament that Rash supports other possible starting places, but lack of evidence at the valuation hearing forces retail value by default.6 One court adopted a starting point for valuing cars as “Blue Book retail value decreased by 5 percent” based on the reasoning that “on average, Chapter 13 debtors would spend 5 percent less than Blue Book retail value if they were forced to replace their car.”7 Another court started with the (retail) purchase price the debtor paid for a used truck 28 months before the petition and subtracted average monthly depreciation to arrive at the value of a replacement truck at confirmation.8 Many of the reported decisions starting at retail then adjust downward to reflect items included in retail value that the debtor does not receive when retaining collateral through the plan, or to reflect the possibility that the debtor can participate in a more favorable market.9

[4]

A significant number of post-Rash decisions have resurrected one form or another of the averaging or mid-point analysis adopted before Rash by the Seventh10 and Second11 Circuits and roundly criticized by the Supreme Court in Rash.12 Some of these courts use the average of retail and wholesale as the starting point for valuation at cramdown in Chapter 13 cases.13 Others make the not unreasonable point that valuation after Rash has to begin somewhere and somewhere for cars in Chapter 13 cases is typically going to fall between retail and “private sale” value determined from used car guides.14 Because retail value in published used car guides includes benefits and allowances excluded by footnote six in Rash,15 the retail guidebook value must be adjusted downward. As explained by the bankruptcy court in In re Gray:16

[T]he NADA value . . . would include allowances for commissions payable to salespeople, limited mechanical and cosmetic refurbishment of the vehicle prior to sale, a limited warranty on the vehicle (if appropriate), overhead costs for storage and insurance for the vehicle, and some carrying charge for the period between the dealer’s purchase of the vehicle and the sale to a customer. The Supreme Court has opined that such items are not properly included in determining replacement value for cram-down purposes. The [Kelley Blue Book] Value on the other hand, represents the price at which a party could obtain a replacement vehicle from a non-dealership seller. While Debtors might not be able to acquire a vehicle at the KBB Value, a dealership certainly could. . . . [T]he value of the Truck lies somewhere between the KBB Value and the NADA Value. . . . The midpoint between the NADA Value and the KBB Value is an appropriate estimate of Debtors’ replacement cost.17
[5]

A few courts have read Rash to preclude uniform starting points or formulas altogether. In EvaBank v. Baxter,18 the district court chastised the bankruptcy court for continuing to use a pre-Rash formula that valued cars at the mid-point between NADA retail and wholesale. The Baxter decision concludes that a debtor’s affidavit with respect to NADA book values could not rebut the prima facie effect of the value stated in the creditor’s proof of claim,19 but the court then offers no guidance whatsoever to determine replacement value in future cases. Somewhat more helpfully, in In re Gonzalez,20 the bankruptcy court said that Rash “precludes the expedient use of uniform starting points” but then described this methodology for valuing a van in a Chapter 13 case:

[R]eplacement value can only be determined under the specific facts of each case. . . . [T]he issue here is what a willing buyer in Mr. Gonzalez’s “trade, business or situation” would pay a willing seller to buy the specific van in question (warts and all) . . . . About Mr. Gonzalez’s “trade, business or situation,” unfortunately, we know nothing . . . . The only evidence about markets to which he might have access is the contract he signed with a local Ford dealer to buy the van, paying $9,900 roughly two years ago. . . . [T]he court concludes that Mr. Gonzalez would buy at retail. Therefore, the appropriate starting point in this case is a retail value. . . . The NADA guide’s figure of $6,000 [is] the only indication of the van’s retail value. The NADA guide, however, assumes a car in “extra clean” condition, which the van here obviously is not, and it also includes other items Rash said should be deducted: . . . . [T]he van here should receive a $1,500 high mileage deduction. Another $1,589 should be deducted for the cost of repairs . . . reconditioning, storage and a warranty would total approximately $500 . . . . Reducing the NADA $6,000 retail value by $3,589 results in a value of $2,411.21
[6]

One message emerging from the post-Rash car valuation cases is the need for a hard second look at how values are determined in the various used car guides. In the quotations and notes above, several bankruptcy courts have taken evidence with respect to the NADA and Kelley Blue Book Used Car Guides and reached inconsistent conclusions about the valuation methodologies behind those publications. The bankruptcy court in In re Russell22 found no evidence that NADA retail included “any extra value for items not retained by [the debtor].”23 In contrast, the bankruptcy courts in In re Gray24 and In re Gonzalez25 found many items of value included in the NADA Used Car Guide retail value that were not properly included in replacement value under Rash. Some of these same courts state that the Kelley Blue Book private party value contains a completely different set of assumptions from the NADA Used Car Guide. Different assumptions require different adjustments to apply Rash at confirmation in a Chapter 13 case.

[7]

When the debtor’s plan surrenders personal property to a lienholder, the replacement value standard in Rash translates into “net fair liquidation value” in a Chapter 13 case.26

[8]

The “replacement value” and “intended use” standards in Rash have been applied by the bankruptcy courts to value all kinds of personal property other than cars and to value real property. Valuing a residence, one court translated replacement value as the traditional “[f]air market value, what a willing seller and a willing purchaser would pay for the property in an arms length transaction as of the date of the filing of the bankruptcy petition.”27 A mobile home was valued applying Rash at the amount the debtors “would incur to obtain a like used mobile home within which to live.”28 In United States v. Donato (In re Donato),29 the court applied Rash to value the IRS’s fourth lien on real property. The IRS argued that the property was worth $926,000 based on expert testimony that the land could be subdivided to realize its “highest and best” use value. The debtors testified that the intended use of the property was a single 14-acre parcel, not a subdivision. Citing Rash, the court valued the property at $186,000: “pursuant to Rash . . . we must determine what the cost would be for the debtors to obtain like property for the same proposed use. . . . [T]he debtors are not intending to subdivide the property, it cannot be valued as subdividable and is properly valued as one parcel.”30 After Rash, it has been held that a lien on business property is valued based on the going concern value of the business, including any goodwill generated by the debtor’s personal services.31

[9]

If there is a lesson in the post-Rash valuation decisions, it is the increased importance of evidence at the valuation hearing.32 If the debtors show up with nothing but wishful testimony about markets they hope to find, the courts have signaled that the default position will hover around retail value.33 The creditor that throws out a few copied pages from a used-car guide without any evidence specific to the debtor’s car can hardly complain when the court starts and ends with the average of numbers from those same pages.34 When the mobile home lender testifies that a 15-year-old manufactured home is worth more than the same model brand new—and mobile home lenders seem to truly believe this is so—don’t be surprised when the bankruptcy court accepts a lower value from the NADA Manufactured Housing Appraisal Guide.35 A debtor that shops at wholesale or flea market prices must prove the availability of that market. The adjustments discussed in Rash are not automatically available to debtors. If the used car guide includes items of value that are not received by the debtor, the courts are requiring debtors to support the adjustment with some evidence.36 Enterprising debtor’s counsel will have to dig into the methodology behind NADA and other used car guides to adequately prepare a post-Rash hearing on the value of a used car. Debtors need more than a few newspaper clippings.37

[10]

Creditors can say that Rash seems to have lightened their burden of proof with respect to value at confirmation in Chapter 13 cases.38 A fair number of the post-Rash decisions adopt retail value in the absence of evidence from the debtor that other markets are available. Some of the courts using mid-point or averaging analysis after Rash have assigned to the debtor the burden of proving entitlement to downward adjustments. Most courts continue to accept used car guides as evidence for the creditor with respect to whichever starting point the court uses.39

[11]

One court has tackled the problem of valuing unique collateral for which there is no replacement market in the post-Rash context. In In re Hermann,40 the IRS had a tax lien on the debtor’s joint tenancy interest in homestead property. The debtor and her husband filed a joint Chapter 13 case and argued that the IRS lien was valueless because the debtor’s joint tenancy interest was not marketable. The bankruptcy court applied Rash and rejected the argument that the uniqueness of the debtor’s interest precluded replacement cost analysis:

Valuation of a secured claim in connection with the Chapter 13 “cram down” is based on what the debtor, who has elected to retain the property, would be willing to pay for replacement property. Valuation is from the debtor’s perspective, not from the creditor’s. . . . There can be no willing buyer in Mrs. Hermann’s situation to measure replacement value to her, since the benefits of joint tenancy ownership of homestead property by spouses is unique to the spouses. . . . But, that does not mean that her interest in the property has no replacement value to Mrs. Hermann. The uniqueness of her interest and its irreplaceable nature enhance its value to her rather than detract from it. . . . Here, one half the total equity in the property, disregarding the IRS lien on her interest, is prima facie proof of the replacement cost of Mrs. Hermann’s interest in the joint tenancy homestead property to her, in valuation of the IRS allowed secured claim under § 506(a) upon her election to retain the property.41
[12]

At least one reported post-Rash decision indicates that Rash will be applied in valuation contexts other than confirmation in Chapter 13 cases. In In re Davis,42 the bankruptcy court applied the willing buyer, willing seller test from Rash twice in a Chapter 13 case: once to value a car at the petition for purposes of adequate protection payments and a second time at the effective date of the plan to determine cramdown value for confirmation under § 1325(a)(5)(B)(ii).43

[13]

The question whether to deduct hypothetical liquidation costs for valuation purposes survives the Rash decision but is perhaps somewhat clarified. Most of the pre-Rash decisions concluded that hypothetical liquidation costs were not deducted to value collateral that a Chapter 13 debtor was retaining through the plan.44 The replacement value standard in Rash is tied by the Supreme Court to the actual disposition or use of property by the debtor, thus it has been said that Rash is consistent with the prior majority view that liquidation costs are not deducted when the debtor keeps property subject to a lien.45 When the debtor surrenders collateral through the plan, Rash would support a valuation that includes a deduction for the lienholder’s costs of disposing of the collateral.46


 

1  520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997).

 

2  In re Ruiz, 227 B.R. 264, 266 (Bankr. W.D. Tex. 1998).

 

3  See § 108.1 [ Valuation in Chapter 13 Cases before Rash ] § 76.4  Valuation in Chapter 13 Cases before Rash.

 

4  See § 109.1 [ Rash and Valuation ] § 76.5  Rash and Valuation.

 

5  See, e.g., In re Knowles, 253 B.R. 412, 414–15 (Bankr. E.D. Ky. 2000) (Declining to follow First Merit, N.A. v. Getz (In re Getz), 242 B.R. 916 (B.A.P. 6th Cir. 2000), starting point for valuing cars in Chapter 13 cases is N.A.D.A. retail. “This Court does not agree that the average of wholesale and retail values is an appropriate starting point, however, and since, as the Getz court points out, the trial court has ‘the discretion . . . to adopt a rule for replacement valuation,’ the Court declines to use the average of wholesale and retail values as a starting point. . . . [T]he proper starting point for determining replacement value in the instant matter is in the N.A.D.A. retail value, with appropriate adjustments to be made. Both the debtors and TMCC should have the opportunity to present evidence concerning the nature and amount of these adjustments.”); In re Jones, 219 B.R. 506, 508 (Bankr. N.D. Ill. 1998) (Car is valued at NADA retail as of date of confirmation because there was no evidence that debtor had access to any market other than the retail car market. “In this case the retail value would seem to be the appropriate cost the Debtor would incur to obtain a similar automobile. . . . [T]he value of Money Store’s secured claim is the price a willing buyer in Debtor’s position would pay to obtain a similar automobile from a willing seller. There has been no evidence presented showing that the Debtor here has any access to the wholesale market. The only market Debtor has access to, absent proof to the contrary, is the retail market. Thus, the retail sale price for Debtor’s automobile would be the same price Debtor would likely spend to purchase a similar vehicle, and the retail sales price for a 1996 Mitsubishi Galant would be the value of Money Store’s secured claim.”); In re Dunlap, 215 B.R. 867, 870 (Bankr. E.D. Ark. 1997) (In dicta, at modification after confirmation, citing Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), “a Chapter 13 plan must propose to pay the value of the vehicle calculated at the retail, not wholesale, market.” Because proposed modification would surrender a car to a creditor who would then dispose of the car at a wholesale auction, modification would inappropriately interfere with retail valuation required by Rash at confirmation of the original plan.); In re Russell, 211 B.R. 12, 13–14 (Bankr. E.D.N.C. 1997) (Applying Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), cramdown value of cars in Chapter 13 cases will be NADA retail absent contrary evidence. “The debtor introduced a single newspaper advertisement placed by a used car dealer for a similar automobile at an asking cash price of $7,500. The court does not find this evidence persuasive. . . . The court agrees with Mr. Russell that the creditor should not be benefitted by extra value for things that the debtor does not have upon retaining and using the property. However, the NADA retail value does not appear to include any extra value for items not retained by Mr. Russell. For example, the NADA retail valuation takes into consideration the mileage on the automobile and does not include warranty costs. Neither does the NADA retail value include reconditioning costs. Consequently, there is no need to subtract these items from the NADA retail value. To require a reduction of retail costs in determining value, as some have suggested is required by footnote 6, would be inconsistent with the specific holding in Rash . . . . [D]educting retail costs is inconsistent with the Supreme Court’s acknowledgment that a relatively simple method of computing value is necessary in chapter 13 cases. . . . [T]he court will use a replacement value which in most cases will be a retail value without reduction for retail costs. Furthermore, the starting point for that evaluation will be NADA retail value.”).

 

6  See, e.g., In re Ruiz, 227 B.R. 264, 266–67 (Bankr. W.D. Tex. 1998) (Replacement value for truck purchased four months before bankruptcy is the retail value. “[The car lender] testifies that he can sell the vehicle today for more than he is owed and would, therefore, not lose a penny. There is no other evidence as to replacement value in the record. . . . [The debtors] are consumers who are using the pickup as transportation in normal everyday life. They have several sources from which to obtain a replacement vehicle. . . . [T]he newspaper classified advertisements. . . . But, there was no evidence . . . . [A]n automobile auction . . . But, there was no evidence . . . . This leaves us only with the third alternative—a dealer. The Court concludes, therefore, that retail value is the proper ‘replacement’ value to use in this case.”); In re McCutchen, 224 B.R. 373, 375 (Bankr. E.D. Mich. 1998) (“[A]s a general rule of thumb, in the absence of evidence . . . [Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)] requires the valuation of an automobile retained for use by a Chapter 13 Debtor who has not demonstrated access to a marketer other than one which sells to the general public, to be determined in the following manner: . . . ‘retail’ value . . . Less . . . the sum of  . . . high mileage deduction . . . reconditioning or repair costs . . . the cost or value of any warranty or guaranty.”); In re Jones, 219 B.R. 506, 508 (Bankr. N.D. Ill. 1998) (“There has been no evidence presented showing that the Debtor here has any access to the wholesale market. The only market Debtor has access to, absent proof to the contrary, is the retail market. Thus, the retail sale price for Debtor’s automobile would be the same price Debtor would likely spend to purchase a similar vehicle.”); In re Gates, 214 B.R. 467, 471–73 (Bankr. D. Md. 1997) (“No evidence was introduced concerning any item included in the retail value set forth in the N.A.D.A. Guide which was not provided to Debtor by the retention of her car. . . . If Debtor had introduced evidence contravening the element of value in Chase’s proof of claim, the burden of proving by a preponderance of the evidence the replacement value of the car would have been ultimately upon Chase.”).

 

7  In re Renzelman, 227 B.R. 740, 741–42 (Bankr. W.D. Mo. 1998). Accord In re Campbell, 234 B.R. 101, 103 (Bankr. W.D. Mo. 1999) (Adopting In re Renzelman, 227 B.R. 740 (Bankr. W.D. Mo. 1998), “the appropriate starting point in the valuation of an automobile retained by a reorganizing debtor should be the Blue Book retail value decreased by 5%. . . . [I]f either the debtors or the secured creditor wished to present evidence as to a replacement value that varied from that starting point, they would be free to do so.”).

 

8  In re Farmer, 257 B.R. 556, 561–62 (Bankr. D. Mont. 2000) (Applying Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), value of truck at effective date of plan is determined by calculating average depreciation between the date of purchase and the petition, then subtracting that average monthly depreciation for each month between the petition and the effective date of the plan. At the petition, court valued the debtor’s truck at $14,175. Debtor purchased the truck 28 months earlier for $20,200. Average monthly depreciation was $215. “For purposes of calculating the value for confirmation which Debtor will need to use in determining the allowed secured claim established through her motion for valuation, the monthly calculated depreciation of $215.00 is deducted from the petition date value of $14,175.00 for five (5) additional months  . . . . The value of the truck for confirmation purposes is $13,100.00 . . . . [T]his estimate value . . . is consistent with the analysis required by Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) . . . . The monthly depreciation occurring from the date Debtor purchased the used truck through the date of the petition as determined above has been extended through the anticipated date of confirmation. Consequently, this methodology applies a calculus consistent with the original used purchase price and the depreciated price debtor may have to pay in obtaining a similar truck for her contemplated use at the time of confirmation.”).

 

9  See, e.g., In re Gonzalez, 295 B.R. 584 (Bankr. N.D. Ill. 2003) (Because there was no contrary evidence, debtor would buy a replacement van at retail and appropriate starting point in this case for valuation would be NADA retail value; because the NADA guide assumes a better condition than the debtor’s van and includes items that Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) said should be deducted, NADA retail value must be reduced to reflect needed repairs, reconditioning, storage and a warranty that the debtor would not receive.); In re Dziendziel, 295 B.R. 184, 190 (Bankr. W.D.N.Y. 2003) (“I find . . . the Replacement Value of the Honda . . . to be $16,673.00. This Replacement Value represents a retail value of $18,523.00, less a $200.00 reconditioning cost, a $900.00 repair cost, a $250.00 cost for a dealer warranty and a $500.00 profit, which is one-half of a used car dealer anticipated profit of $1,000.00 per vehicle. I believe that the Debtors would be able to sell the Honda privately for this amount, or obtain a similar Honda for this price in a private sale.”); In re McCutchen, 224 B.R. 373, 375 (Bankr. E.D. Mich. 1998) (When the only evidence of value is the debtor’s testimony and copies of the NADA guide, court will begin with retail value and reduce that value by the costs of reconditioning, any high mileage deduction necessary, and the cost or value of warranties or guaranties. Debtor purchased a 1995 Neon a year before the Chapter 13 case from a retail automobile dealer. Debtor proposed to cram down the value of the car to $4,000 but offered no evidence other than her own testimony. A lienholder introduced NADA car guide showing a retail value of $7,500. “[A]s a general rule of thumb, in the absence of evidence . . . [Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)] requires the valuation of an automobile retained for use by a Chapter 13 Debtor who has not demonstrated access to a marketer other than one which sells to the general public, to be determined in the following manner: . . . ‘retail’ value . . . [l]ess . . . the sum of  . . . high mileage deduction . . . reconditioning or repair costs . . . the cost or value of any warranty or guaranty.”); In re Gates, 214 B.R. 467, 471–73 (Bankr. D. Md. 1997) (Replacement value of automobile in a consumer case is retail value adjusted downward to reflect items of value not received by the debtor; once creditor has introduced evidence of retail value, burden of proof shifts to the debtor to prove downward adjusting items. “In a consumer case, replacement value of a motor vehicle used primarily for personal transportation should be calculated by first determining the retail value, as that is the price that a consumer would have to pay to replace the vehicle in the consumer market. Accordingly, in such cases, replacement value equals retail value less the value of items, if any, which were included in the retail value but which were not received by a debtor who retains her vehicle. . . . Chase submitted evidence of the retail value of Debtor’s automobile consisting of a photocopy of a relevant page from the N.A.D.A. Guide. Debtor did not dispute the accuracy of the N.A.D.A. Guide. . . . No evidence was introduced concerning any item included in the retail value set forth in the N.A.D.A. Guide which was not provided to Debtor by the retention of her car. . . . Where the proof of claim established prima facie the fully secured claim of the creditor, evidence of facts contravening the secured amount of the claim, such as items which were included in the retail value but not received by the debtor, must be produced by the objecting party which alleges a lower replacement value. In this case, Debtor solely argued . . . that trade-in value must be applied. Therefore, Debtor did not overcome the prima facie validity of Chase’s secured claim . . . . If Debtor had introduced evidence contravening the element of value in Chase’s proof of claim, the burden of proving by a preponderance of the evidence the replacement value of the car would have been ultimately upon Chase.”).

 

10  See In re Hoskins, 102 F.3d 311 (7th Cir. 1996).

 

11  See GMAC v. Valenti (In re Valenti), 105 F.3d 55 (2d Cir. 1997).

 

12  520 U.S. at 963–64.

 

13  See, e.g., First Merit N.A. v. Getz (In re Getz), 242 B.R. 916, 919–20 (B.A.P. 6th Cir. 2000) (Average of NADA wholesale and retail is a permissible starting and ending point for the value of a car after Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), when the parties submit no evidence other than pages out of the NADA book. “Using the average of the N.A.D.A. wholesale and retail values as a starting point to determine the replacement value of a vehicle for a Chapter 13 cram down is consistent with the dictates of Rash, which recognized the discretion of the trial judge to adopt a rule for replacement valuation ‘to serve the interests of predictability and uniformity.’ . . . [T]he bankruptcy court’s approach of using the average of retail and wholesale values merely as the starting point subject to adjustment by other evidence introduced by the parties is not precluded by Rash’s rejection of the Seventh Circuit’s approach of mechanically assigning the midpoint between the collateral’s foreclosure and replacement values. . . . [T]he only evidence of the value of the Debtors’ vehicle in the present case was the N.A.D.A. guidelines. Neither party presented any evidence of value specific to the particular vehicle, nor did either party present any evidence of appropriate adjustments. Therefore, the bankruptcy court’s factual finding that the replacement value of the vehicle was the average of the N.A.D.A. wholesale and retail values is not clearly erroneous.”); In re Boise, No. 03-10015, 2003 WL 1955759, at *1 (Bankr. D. Vt. Apr. 24, 2003) (unpublished) (Applying local rule that values cars at “the midpoint between the NADA wholesale value and the NADA retail value unless” the parties agree otherwise or there is contrary evidence, after a hearing court values car at $8,250—between the debtors’ $8,000 valuation and the $8,700 NADA midpoint.); In re Marquez, 270 B.R. 761, 766–67 (Bankr. D. Ariz. 2001) (Agreeing with First Merit, N.A. v. Getz (In re Getz), 242 B.R. 916 (B.A.P. 6th Cir. 2000), valuing car at cramdown starts with the average of wholesale and retail adjusted for items that the debtor does not receive. “This court agrees with the averaging approach approved in Getz. . . . Using an average between wholesale and retail value as a starting point . . . ‘subject to adjustment by other evidence introduced by the parties’ . . . . [U]nder [Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)] the court must determine what it would cost the Debtors to replace the Dodge, not what value a bank would use in making a financing decision. . . . [T]he court finds that the best evidence of the Dodge’s retail value is the $14,999 the Debtors paid for the Dodge . . . . [T]he court will adopt the [Kelly Blue Book] wholesale value of $12,950 as the wholesale value of the Dodge and average that value with the $14,999 retail value to calculate the starting point for the Dodge’s replacement value . . . $13,974.50. . . . [T]he second step in the analysis is to adjust that starting value up or down based upon the actual features and condition of the vehicle because a creditor is not entitled to the value of items the Debtors do not receive. . . . Because KBB wholesale value includes reconditioning costs, the starting value includes value that the Debtors do not receive. Accordingly, reconditioning costs [$300] must be deducted from the starting value.”); In re Richards, 243 B.R. 15, 19 (Bankr. N.D. Ohio 1999) (Adopting In re Glueck, 223 B.R. 514 (Bankr. S.D. Ohio 1998), the average of the wholesale and retail values determined from used-vehicle guidebook is the starting point for determining the replacement value of an automobile. “[T]he Glueck method focuses on the value of the collateral in the market as a whole rather than focusing on a particular subset of the automobile sales industry. . . . [A]dopting this method will be a more cost effective means of determining the replacement value of used automobiles. . . . [T]his Court will use the average of a vehicle’s retail and wholesale values as established in a used car guide to determine its replacement value pursuant to 11 U.S.C. § 506(a). However, the Court will also consider additional probative evidence of a vehicle’s value if offered, such as an expert evaluation of the automobile.”); In re Lyles, 226 B.R. 854 (Bankr. W.D. Tenn. 1998) (Adopting the reasoning in In re Glueck, 223 B.R. 514 (Bankr. S.D. Ohio 1998), the starting point for valuing cars at cramdown in Chapter 13 cases after Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) is the average of retail and wholesale.); In re Glueck, 223 B.R. 514, 519–20 (Bankr. S.D. Ohio 1998) (Mid-point between wholesale and retail in a used car guide is the starting point for valuation after Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997). In Rash, the Supreme Court cited Taffi v. United States (In re Taffi), 96 F.3d 1190 (9th Cir. 1996) (en banc), with approval. Taffi found that “replacement value” was not synonymous with “fair market value” because the collateral is not being replaced in a cramdown in a Chapter 13 case. “[T]he bankruptcy bar need, at a minimum, a ‘starting point’ for determining valuation of automobiles for cram down under § 1325(a)(5)(B). The Rash decision did not provide a definitive starting point. . . . In the experience of this Court, debtors in Chapter 13 proceedings, when faced with the need to purchase an automobile, do not routinely make that purchase from an automobile dealership. . . . Debtors are able to purchase automobiles at auctions, from private individuals, from used car lots, from family members, or from rental car companies . . . . That market is clearly broader than a purely retail market. . . . [I]t would be prohibitively costly to require expert testimony for determination of value of every automobile in Chapter 13 proceedings. . . . A debtor’s inability to regularly access the wholesale market requires an upward adjustment from wholesale value. . . . This Court is not setting the average of retail and wholesale as the per se value for purposes of cram down under § 1325(a)(5)(B), but is merely establishing that as a starting point for the analysis. The Court will consider any additional evidence presented by the parties probative of the value of the relevant automobile.”); In re Oglesby, 221 B.R. 515, 519 (Bankr. D. Colo. 1998) (“In general, in Chapter 13 cases where the debtor proposes to retain a vehicle for personal use, the starting point for valuation of that vehicle will not be retail value. Since Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) dictates that the replacement value of the vehicle does not include items such as warranties, inventory storage and reconditioning, a downward adjustment must be made to the retail value contained in the NADA guides. Neither would the wholesale value be appropriate, because most, if not all, debtors have no ability to replace the vehicle in the wholesale market. Therefore, in order to facilitate a more predictable, somewhat simplified, less litigious valuation process, where value of a debtor’s automobile is disputed, a starting point for valuation in a Chapter 13 cram down in this Court will be midpoint between retail and wholesale, as may be established by agreement between the parties, or by the most current applicable NADA guide. That value will be subject to and may be modified by, such evidence as either party may present at a hearing.”); In re Franklin, 213 B.R. 781, 783 (Bankr. N.D. Fla. 1997) (Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) does not change rationale of In re Rowland, 166 B.R. 172 (Bankr. N.D. Fla. 1994): starting point for replacement value is average of retail and wholesale NADA values. “In expressly recognizing that several components go into retail pricing that should not be included as a part of the replacement value of collateral, the Supreme Court has allowed bankruptcy courts to move the appropriate measure of replacement value back to some point between wholesale and retail values. Since the rule I announced in Rowland does not absolutely fix the value at the midpoint between retail and wholesale, but merely utilizes that as a starting point based on a recognition that such a value more closely approximates a price available in an open market rather than purely a retail market, I do not believe that the decision in Rash dictates any change in methodology.” With respect to the extended warranty, “[t]he prorated value for the extended warranty protection should be added back into the value.” The court devised a ratio the numerator being the mileage on the car and the denominator being the 36,000-mile limit on the warranty and multiplied that ratio by the cost of the extended warranty to determine its component of value.).

 

14  See In re King, No. 01-37214DWS, 2003 WL 22110779, at *5 (Bankr. E.D. Pa. Sept. 2, 2003) (unpublished) (Using NADA guide, replacement value of 1997 Ford Explorer is somewhere between retail and private sale value. “A buyer in the Debtor’s position would not be able to secure a wholesale price for the vehicle. . . . [S]he would pay either retail value or some lesser price if she bought it from a private party. . . . I conclude that the appropriate value is something slightly less than retail to account for the availability of the private sale option.”); In re Stembridge, 287 B.R. 658, 663–64 (Bankr. N.D. Tex. 2002) (In a district that confirms cases after the claims bar date, replacement value of a pickup truck is determined as of the confirmation hearing using this formula: “replacement value should be calculated starting from the retail value provided in the N.A.D.A. Official Used Car Guide . . . . In the absence of specific evidence of the value of benefits not received by a debtor but included in the NADA Value, the NADA Value may be averaged with the contemporaneous Kelley Blue Book Private Party Value to produce a replacement value.”); In re Gray, 285 B.R. 379 (Bankr. N.D. Tex. 2002) (Absent contrary evidence, replacement value of a car at confirmation is the midpoint between the Kelly Blue Book private party value and the retail value established by the National Automobile Dealers Association.).

 

15  See § 109.1 [ Rash and Valuation ] § 76.5  Rash and Valuation.

 

16  285 B.R. 379 (Bankr. N.D. Tex. 2002).

 

17  285 B.R. at 384–85. Accord In re Stembridge, 287 B.R. 658 (Bankr. N.D. Tex. 2002).

 

18  278 B.R. 867 (N.D. Ala. 2002).

 

19  See § 287.1 [ Timing, Procedure and Evidence Presumption ] § 135.1  Timing, Procedure and Evidence Presumption.

 

20  295 B.R. 584 (Bankr. N.D. Ill. 2003).

 

21  295 B.R. at 590–92.

 

22  211 B.R. 12 (Bankr. E.D.N.C. 1997).

 

23  211 B.R. at 13.

 

24  285 B.R. 379 (Bankr. N.D. Tex. 2002).

 

25  295 B.R. 584 (Bankr. N.D. Ill. 2003).

 

26  In re Barclay, 276 B.R. 276, 279–81 (Bankr. N.D. Ala. 2001) (At modification after confirmation, the debtor can surrender a car but not “in full satisfaction” of the allowed secured claim because the valuation method at modification would be different than at confirmation. “[T]he valuation used at confirmation was replacement value as directed by the Supreme Court in [Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)]. However, if the debtor’s proposed use of the collateral had been surrender, a different valuation method would have been used. The valuation would not be replacement value, but instead, the method of valuation would be foreclosure value. . . . When a debtor proposes to modify a plan to surrender collateral which was originally valued in a retention context, the valuation must change. . . . [T]he two valuation amounts will more than likely be different. Because the amounts are different, the debtors’ argument that the amount to be applied to the secured claim by surrender (as determined by the value of the collateral as established at confirmation) is the same as the amount of the secured claim is incorrect. . . . [S]urrender would call for a foreclosure valuation, which is generally lower than a replacement valuation, when applied to the amount of the secured claim, the result is usually a deficiency claim.”); In re Allen, 240 B.R. 231, 236 (Bankr. W.D. Va. 1999) (At confirmation 16 months after filing when plan surrenders car to lender, valuation standard is net fair liquidation value as of the date of the petition. “The NADA standard of retail value is not relevant to its valuation for the purpose of the plan now before the Court. The correct standard for this purpose is the net fair liquidation value of such vehicle as of the date of filing.”).

 

27  In re Edwards, 245 B.R. 917, 920 (Bankr. S.D. Ga. 2000).

 

28  In re Stratton, 248 B.R. 177, 182 (Bankr. D. Mont. 2000).

 

29  253 B.R. 151 (M.D. Pa. 2000).

 

30  253 B.R. at 156–57.

 

31  In re Thomas, 231 B.R. 581 (Bankr. E.D. Pa. 1999) (After Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), the secured amount of the IRS’s lien on the debtors’ closely held business is based on going concern value including goodwill that the corporation enjoys by virtue of the debtors’ personal services. Absence of noncompete clause does not change this result because debtor could not usurp goodwill by surrendering corporation to the IRS.).

 

32  See, e.g., EvaBank v. Baxter, 278 B.R. 867, 879 (N.D. Ala. 2002) (Rejecting formula approach to value of car, debtor’s affidavit with respect to NADA book values could not rebut prima facie effect of the value stated in the creditor’s proof of claim. “Debtor had to do more than just object. She had to present evidence of sufficient evidentiary weight to meet her burden of going forward . . . . Debtor’s affidavit is without any facts to demonstrate her basis for valuation. As such, it ‘is a mere conclusion and that is insufficient.’ . . . [A]fter Debtor objected to EvaBank’s secured claim by use of the Motion to Determine Value, what the Bankruptcy Court had in front of it was EvaBank’s deemed allowed claim constituting prima facie evidence of its secured status, versus an objection supported by no evidence. Given this state of evidentiary affairs, EvaBank was entitled to prevail on valuation without having to put on any additional evidence.”); In re Holl, No. 03-13361 K, 2003 WL 23009119 (Bankr. W.D.N.Y. Nov. 7, 2003) (Rejecting debtor’s three-and-a-half-year-old appraisal, bankruptcy court accepts bank’s more recent appraisal of the value of building that contains office space, retail space and an apartment.); In re Gonzalez, 295 B.R. 584, 591–92 (Bankr. N.D. Ill. 2003) (“[T]he issue here is what a willing buyer in Mr. Gonzalez’s ‘trade, business or situation’ would pay a willing seller to buy the specific van in question (warts and all) . . . . About Mr. Gonzalez’s ‘trade, business or situation,’ unfortunately, we know nothing . . . . The only evidence about markets to which he might have access is the contract he signed . . . . [T]he court concludes that Mr. Gonzalez would buy at retail. Therefore, the appropriate starting point in this case is a retail value.”); In re Moore, No. 02-52271 13, 2003 WL 1872987 (Bankr. W.D. Va. Apr. 11, 2003) (unpublished) (Bankruptcy court finds “not credible” appraiser’s testimony that retail value of 15-year old mobile home in average condition exceeds its original purchase price and exceeds the purchase price of a new mobile home.); In re Cline, 275 B.R. 523 (Bankr. S.D. Ohio 2001) (Bankruptcy court finds that employee of mobile home lender lacked independence and appraisal at price higher than purchase price three years earlier was not accepted.); In re Knight, 254 B.R. 227 (Bankr. C.D. Ill. 2000) (Applying the replacement value standard from Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), court values one car at $4,000 based on the debtors’ testimony and values another car at $2,950 notwithstanding evidence from a creditor that the car, if returned, would sell for no less than $6,000.); In re Elser, 249 B.R. 265 (Bankr. W.D. Pa. 2000) (Bankruptcy court accepts debtors’ expert’s testimony and finds that deferred maintenance and disrepair reduced the value of the debtors’ home below the amount of the first and second mortgages and tax liens, thus the bank’s third mortgage is wholly unsecured.); In re Stratton, 248 B.R. 177, 182 (Bankr. D. Mont. 2000) (Citing Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997), “[t]he proper value for ‘cram down’ under § 1325(a)(5)(B) is the ‘cost the debtor would incur for a like asset for the same proposed use.’ . . . Donna testified that her value of $37,712 represents what she would incur to obtain a like used mobile home within which to live. . . . Based upon Donna’s testimony and the absence of any evidence showing any other value, the Court finds that the value of Greenpoint’s security . . . is $37,712.” Court cites Rule 701 of the Federal Rules of Evidence for the proposition that “an owner is competent to give her opinion on the value of her property.”); In re Brown, 244 B.R. 603, 612–13 (Bankr. W.D. Va. 2000) (Although rejecting creditor’s formula approach to valuing used furniture, debtor had burden of proof with respect to value, and debtor failed to carry that burden notwithstanding the debtor’s testimony with respect to value. “Heilig-Meyers has invited the Court to adopt a ‘rule-of-thumb’ for valuation of used furniture and appliances based on a standard percentage discount against original purchase price and proportional to the time of usage. The Court declines to do so . . . . [N]o evidence was offered by Heilig-Meyers to provide a basis for the adoption of any such rule. . . . [T]he wide variety of factual circumstances which impinge upon the valuation of such property would make the results of such a rule inaccurate in many individual cases.” Although the debtor as the owner of personal property may testify and give an opinion with respect to value, “Mrs. Brown’s testimony that the property is worth $1,500, which in effect is uncontradicted, does not suffice to establish such valuation by a preponderance of the evidence. . . . Mrs. Brown was unable to provide any detailed explanation of how she arrived at a lump sum value of $1,500 . . . . She did not testify as to any specific values that she had found at ‘yard sales’ for items similar in quality and condition . . . . [A]t the end of the day the Court is simply left with the feeling that $1,500 was a figure just pulled out of the air. . . . Accordingly, confirmation of the proposed Plan will be denied without prejudice.”); Winston v. Chrysler Fin. Corp. (In re Winston), 236 B.R. 167, 171 (Bankr. E.D. Pa. 1999) (“[E]stablishment of a set formula for vehicle valuation in a cramdown bifurcation based upon ‘book’ value is neither necessary nor, in light of the Court’s statements in [Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)], consistent with § 506(a). We therefore believe that we must be prepared to value vehicles on a case-by-case basis, depending on the evidence presented.” The car lender’s representative failed to inspect the car. The debtor’s valuation was “competent,” but “not worth a great deal.” Court valued car at $6,000, closer to the debtor’s $4,000–5,000 value than to the creditor’s $9,150 retail book value.); In re Petrella, 230 B.R. 829, 834 (Bankr. N.D. Ohio 1999) (Creditor’s evidence of home value from a licensed realtor and appraiser was more convincing than the debtor’s noncertified documents and personal opinions.); Rolle v. Chase Manhattan Mortgage Corp. (In re Rolle), 218 B.R. 636, 638 n.1 (Bankr. S.D. Fla. 1998) (Mindful of the Supreme Court’s caution in Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) that a “split-the-difference” approach to valuation was not appropriate, when debtor’s expert valued real property at $22,000 and creditor’s expert appraised the same property at $24,000 and both appraisals were “well documented with no significant difference in the methods used or conclusions reached,” court fixed value at $23,000, noting “to choose one over the other would be to split hairs.”).

 

33  See, e.g., In re Renzelman, 227 B.R. 740, 742 (Bankr. W.D. Mo. 1998) (Court picks 5% below NADA retail as the starting point for valuing cars. “This is a starting point. If either the debtors or the secured creditors wish to present evidence as to a replacement value that varies from this assumption, they are free to do so.”).

 

34  See, e.g., First Merit N.A. v. Getz (In re Getz), 242 B.R. 916, 919–20 (B.A.P. 6th Cir. 2000) (“[T]he only evidence of the value of the Debtors’ vehicle in the present case was the N.A.D.A. guidelines. Neither party presented any evidence of value specific to the particular vehicle, nor did either party present any evidence of appropriate adjustments. Therefore, the bankruptcy court’s factual finding that the replacement value of the vehicle was the average of the N.A.D.A. wholesale and retail values is not clearly erroneous.”).

 

35  See In re Moore, No. 02-52271 13, 2003 WL 1872987, at *3 (Bankr. W.D. Va. Apr. 11, 2003) (unpublished) (“N.A.D.A. guidebooks are widely used by courts and Chapter 13 Trustees in order to value collateral, although they are not considered a standard for measuring compliance with the Bankruptcy Code. . . . The appraiser’s assertion that the retail value of the Debtor’s mobile home exceeds its purchase price is not credible. . . . A mobile home, like a motor vehicle, has a limited economic life and depreciates, not appreciates, each year. . . . It is inconceivable that the value of a fifteen-year old, ‘average’ condition mobile home is $28,200 when the cost of a new mobile home is $27,648.”); In re Cline, 275 B.R. 523 (Bankr. S.D. Ohio 2001) (Though certified as a mobile home appraiser, employee of creditor lacked independence, and appraisal of mobile home at price higher than purchase price three years before bankruptcy was rejected.).

 

36  See In re Marquez, 270 B.R. 761, 767 (Bankr. D. Ariz. 2001) (After averaging wholesale and retail values for a car from the Kelly Blue Book, court deducts reconditioning costs: “Because KBB wholesale value includes reconditioning costs, the starting value includes value that the Debtors do not receive. Accordingly, reconditioning costs [$300] must be deducted from the starting value.”).

 

37  See, e.g., In re Russell, 211 B.R. 12, 13 (Bankr. E.D.N.C. 1997) (“The debtor introduced a single newspaper advertisement placed by a used car dealer for a similar automobile at an asking cash price of $7,500. The court does not find this evidence persuasive.”).

 

38  See, e.g., EvaBank v. Baxter, 278 B.R. 867, 876–79 (N.D. Ala. 2002) (Formula that started valuation at midpoint between NADA retail and wholesale inappropriately shifted burden of proof to the creditor; debtor’s affidavit with respect to NADA book values could not rebut prima facie effect of the value stated in the creditor’s proof of claim. “Although one might dispute what replacement value is under [Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)] it cannot be disputed that Rash stands for the proposition that it is improper to make a valuation determination based on the arbitrary formula of splitting the difference between two values . . . . [R]eplacement value is ascertained based on the relevant factors in each case . . . . [T]he Bankruptcy Court’s cookie-cutter valuation procedure . . . improperly shifts the burden of going forward to the creditor. . . . Debtor had to do more than just object. She had to present evidence of sufficient evidentiary weight to meet her burden of going forward . . . . EvaBank was entitled to prevail on valuation without having to put on any additional evidence.”).

 

39  See, e.g., First Merit N.A. v. Getz (In re Getz), 242 B.R. 916 (B.A.P. 6th Cir. 2000) (Absent other evidence, bankruptcy court’s factual finding that the replacement value of a car was the average of the NADA wholesale and retail values was not clearly erroneous.); In re King, No. 01-37214DWS, 2003 WL 22110779 (Bankr. E.D. Pa. Sept. 2, 2003) (unpublished) (Using NADA guide, replacement value is somewhere between retail and private- sale value.); In re Gonzalez, 295 B.R. 584 (Bankr. N.D. Ill. 2003) (Because the only evidence of appropriate market was the debtor’s purchase of the van two years earlier from a Ford dealer, appropriate starting point to value the van is NADA retail value, adjusted to exclude items Rash said should be deducted.); In re Boise, No. 03-10015, 2003 WL 1955759 (Bankr. D. Vt. Apr. 24, 2003) (unpublished) (Absent contrary evidence, cars are valued at midpoint between NADA wholesale and NADA retail values.); In re Moore, No. 02-52271 13, 2003 WL 1872987 (Bankr. W.D. Va. Apr. 11, 2003) (unpublished) (Court values mobile home using NADA Manufactured Housing Appraisal Guide.); In re Stembridge, 287 B.R. 658 (Bankr. N.D. Tex. 2002) (Replacement value is calculated starting with retail value from NADA Official Used Car Guide; in absence of other evidence, NADA value is then averaged with Kelley Blue Book private-party value to produce replacement value.); In re Gray, 285 B.R. 379 (Bankr. N.D. Tex. 2002) (Absent contrary evidence, replacement value of a car is midpoint between the Kelley Blue Book private party value and NADA retail value.); In re Marquez, 270 B.R. 761 (Bankr. D. Ariz. 2001) (Valuing car at cramdown starts with the average of wholesale and retail Kelly Blue Book values adjusted for items that the debtor does not receive.); In re Knowles, 253 B.R. 412 (Bankr. E.D. Ky. 2000) (Starting point for valuing cars in Chapter 13 cases is NADA retail.); In re Richards, 243 B.R. 15 (Bankr. N.D. Ohio 1999) (Starting point for determining the replacement value of an automobile is the average of wholesale and retail values determined from used-vehicle guidebook.); In re McCutchen, 224 B.R. 373 (Bankr. E.D. Mich. 1998) (In the absence of contrary evidence, court begins with NADA retail value for a used car.); In re Glueck, 223 B.R. 514 (Bankr. S.D. Ohio 1998) (Mid-point between wholesale and retail in a used car guide is the starting point for valuation after Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997).); In re Oglesby, 221 B.R. 515 (Bankr. D. Colo. 1998) (To facilitate predictability and less litigation, starting point for valuation in a Chapter 13 cramdown of a used car will be the mid-point between retail and wholesale established by agreement or by the most current NADA guide.); In re Jenkins, 215 B.R. 689 (Bankr. N.D. Tex. 1997) (Court suggests that debtors and creditors negotiate the value of cars beginning with the NADA retail value adjusted upward or downward based on condition of the car and other factors.); In re Franklin, 213 B.R. 781 (Bankr. N.D. Fla. 1997) (Starting point for replacement value is average of retail and wholesale NADA values.); In re Russell, 211 B.R. 12 (Bankr. E.D.N.C. 1997) (Cramdown value of cars in Chapter 13 cases will be NADA retail absent contrary evidence.).

 

40  224 B.R. 101 (Bankr. D. Minn. 1998).

 

41  224 B.R. at 101–04.

 

42  215 B.R. 824 (Bankr. N.D. Tex. 1997).

 

43  Accord In re Jenkins, 215 B.R. 689 (Bankr. N.D. Tex. 1997) (When parties agree that value of car will not change between petition and confirmation, it is appropriate to apply Rash to determine value that must be adequately protected.).

 

44  See § 108.1 [ Valuation in Chapter 13 Cases before Rash ] § 76.4  Valuation in Chapter 13 Cases before Rash.

 

45  See In re Richardson, 280 B.R. 717 (Bankr. S.D. Ala. 2001) (For § 522(f) purposes at confirmation, estimated costs of a hypothetical sale are not deducted to determine whether judgment lienholder has a secured claim.); Smith v. Household Fin. Realty Corp. of NY (In re Smith), 262 B.R. 594 (Bankr. E.D.N.Y. 2001) (Debtor cannot strip second mortgage lien because hypothetical liquidation costs are not deducted to value real property when Chapter 13 plan proposes to keep the property; lien is partially secured and Nobelman v. American Savings Bank, 508 U.S. 324, 113 S. Ct. 2106, 124 L. Ed. 2d 228 (1993) would not allow lien stripping.); In re Leedy, 230 B.R. 678, 682 (Bankr. E.D. Va. 1999) (Early withdrawal fees and penalties are not deducted to determine the value of a 401(k) plan that is subject to IRS lien. Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997) indicates that valuation in a Chapter 13 case should be tied to the “actual disposition or use” of the property. “Although [Coker v. Sovran Equity Mortgage Corp. (In re Coker), 973 F.2d 258 (4th Cir. 1992),] and [Brown & Co. Securities Corp. v. Balbus (In re Balbus), 933 F.2d 246 (4th Cir. 1991),] specifically addressed direct transactional costs (such as real estate broker commissions), the same reasoning would nevertheless lead to the same conclusion that the indirect ‘tax costs’ of withdrawing funds form the 401(k) plan should likewise not be subtracted for the purpose of valuing the secured creditor’s interest under § 506(a).”); Corona v. IRS (In re Corona), 230 B.R. 204, 205 (Bankr. N.D. Ga. 1997) (“[B]ecause the debtors intend to retain their residence, they are not entitled to deduct hypothetical selling costs from the value of their residence when determining the amount of the Internal Revenue Service’s secured claim. Associates Commercial Corp. v. Rash [, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997)].”).

 

46  See In re Allen, 240 B.R. 231 (Bankr. W.D. Va. 1999) (At confirmation 16 months after filing when plan surrenders car to lender, valuation standard is net fair liquidation value as of the date of the petition.).