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If a vehicle is properly claimed as exempt or otherwise abandoned by the bankruptcy trustee, you can retain it, provided you are able to maintain the payments secured thereby so as to avoid a repossession by the secured creditor. It may be necessary to execute a reaffirmation agreement with the secured creditor.

There are certain eligibility requirements for Chapter 7. The means test may steer an above-median debtor into Chapter 13 or Chapter 11 instead. Additionally, one is not eligible for a discharge in a Chapter 7 case after receiving a discharge in a prior Chapter 7 case filed within the last 8 years.

A discharge is the legal mechanism under the bankruptcy laws for relieving one of the legal obligation to repay debt. The Bankruptcy Code addresses the categories of debt that are eligible for discharge under the various bankruptcy chapters. Additionally, one may lose the right to receive a discharge based on certain transactions or misconduct as set forth in the law.

A reaffirmation agreement is a post-bankruptcy agreement between a debtor and a secured creditor, whereby the debtor agrees to become re-obligated on a debt that would otherwise be discharged. Because a reaffirmation agreement defeats the purpose of the discharge to the extent of the reaffirmed debt, one must carefully weigh the risks of such a commitment. Fortunately, the law provides a 60 day rescission period so that a debtor can effectively change his or her mind after signing a reaffirmation agreement.