The car lender may require you to sign a reaffirmation agreement after your case is filed. A reaffirmation is a long, fancy name for a new contract with the same lender signed after the bankruptcy in which you again promise to pay them for the car.
If your vehicle loan is not with a credit union, and your budget says you don’t have enough income to pay for the car, the Richmond Bankruptcy Court will generally not approve the reaffirmation unless the lender is making a significant concession that improves the terms of the loan for you. Why not? Well, the Court does not want you to be responsible for any deficiency if the lender repossesses the vehicle because you truly can’t afford the payments. Or, if the vehicle breaks down, you can simply turn the vehicle in and the lender can’t make you finish paying for it.
If your vehicle is financed by a credit union, a reaffirmation will mean that they can repossess the vehicle if you fail to make your payments on time or fail to keep the vehicle insured despite the bankruptcy. A credit union reaffirmation is effective as soon as you sign it and you will not get the title until the loan is paid in full. Any deficiency balance after a repossession is STILL YOUR RESPONSIBILITY.