Thank you for your question.
Federal law reigns supreme in bankruptcy for Social Security benefits. Those should be no problem, such income is exempt.
Re-affirming on any debt allows the Debtor to keep the collateral. Houses, cars, even big-screen TVs...so long as the "equity" is under the applicable exemption limit. If worth too much, the Trustee
just requires a "payout" of the excess dollars for the benefit of other creditors.
Market value of a vehicle is what rules on Schedule C. Where I'm at, the Trustees prefer use of the NADA guide, but even that is supposed to take into account the condition of the vehicle. A nice written estimate of repair costs taken to the Section 341 Hearing can go a long way towards satisfying the Trustee that the value is accurate.
Dual-exemption states like Michigan require the Debtor to chose one or the other. No "mix and match" allowed.
A recent court decision (In re Schafer
, B.A.P. Case No. 10-8030 (B.A.P. 6th Cir. 2011), said the MI BK-only exemption scheme is no longer allowed. So, make sure that your sources are up-to-date on the exemptions to be used (that's part of what attorneys pay for with BK paperwork preparation software--the updates are key). The decision was about a month ago, so BK Debtors can now use the exemption scheme at Mich. Comp. Laws §(NNN) NNN-NNNN OR the federal scheme.
Banks don't cut loan balances unless forced to. A "cram-down" in a Chapter 7
case is generally possible only for a 2nd mortgage, not for a first mortgage.