Dealing with secured debts in bankruptcy is not always as easy as managing an unsecured debt. In order to keep possession of the asset, the debtor will need to continue making payments on the secured debt. Although keeping a secured debt asset in bankruptcy will require payments to continue there may be a way to lower monthly payment requirements outside of bankruptcy after the case is completed.
A person could request a reaffirmation of the loan, which would create a new agreement that reinstates old terms and waives any discharge rights of the bankruptcy. This means that if a person was granted a debt discharge of the loan, but wants to instead keep the asset and make payments, they can simply reinstate the old loan through reaffirmation.
Refinancing the loan is another option that may provide a lowered monthly payment while allowing the debtor to keep possession of the car. However, not everyone will qualify for a refinanced loan or be able to secure one with a less than charitable lender. Further, refinancing should not be used in attempt to build credit after a bankruptcy, but rather only used when financially necessary.
In most cases, the best bet is to be sure that filing for bankruptcy is necessary for the purposes of lowering debts and allowing for asset protection. Filing for bankruptcy only to turn around and reaffirm the loan or refinance could be a costly action in the end.