When you file for Chapter 7 Bankruptcy and you have a secured loan, such as a car, and you wish to keep the car and continue to make payments on it, the lender will request that you sign a reaffirmation agreement on the note, which would make the debt survive the bankruptcy. For many people who are paying on a car note, this makes sense because they need a vehicle and this saves them the trouble of trying to find another car. Furthermore, many Debtors will be able to keep their car as long as they keep making the payments, and if they later cannot make the payments, the debt will still be discharged In Re Chim.
If your current expenses exceed your income you may have to attend a hearing in order to get the reaffirmation agreement approved because it may not be in your best interest to reaffirm the debt.
Reaffirming a mortgage is a completely different matter from reaffirming a car note. See my post on reaffirming mortgages.
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