What should I do if I don't want my car repossessed?

Ask for a reaffirmation agreement.

It happened because you made the always catastrophic mistake of filing without a lawyer. Get one and see if your missteps are fixable.

They probably playing tough because you did not execute a reaffirmation agreement. I'd contact the lender & offer to execute a new loan on the car, if they'll agree. With your payment history, they should.

Maybe you misunderstood the letter because the credit union cannot repossess the vehicle if you are current on the payments (unless the bankruptcy court give them permission to do that which will not be given if you are current on payments). Maybe they want you to "reaffirm" the debt which means entering into a new contract with the credit union for the car loan under the same terms and have the bankruptcy court approve it. Generally reaffirmation is not necessary but you need to discuss with an attorney if you should do that. Your car cannot be repossessed without permission from the bankruptcy court. If the credit union is asking for permission from the court to repossess your car then that would be because they claim you are not current with the payments and you can go to the hearing and take proof that you are current so that the bankruptcy court will not give the credit union permission to repossess your car. To get permission to repossess the car the credit union has to file a "motion for relief from the automatic stay" and send you a copy of the motion papers and tell you the date of the hearing in court so that you can attend and oppose the motion.

Credit Unions often take the position that you must sign a reaffirmation agreement in which you agree that your personal liability on the debt will not be discharged in bankruptcy or else return the vehicle. A reaffirmation agreement must be entered into prior to the discharge of your debts.

The credit union probably requires you to sign a reaffirmation agreement. Contact them and tell them you want to keep the car.

It's not clear from your stated facts exactly what is going on, but I suspect that your case is complete, a discharge has been issued, and no reaffirmation agreement was filed. If that is the case, you may not be able to do anything. You could try a motion to reopen and revoke the discharge in order to sign and file a reaffirmation agreement. I have seen these succeed with a mortgage before, but I have also seen such motions fail. Your best bet is to contact an attorney for guidance here. If the above is NOT the case, make sure your payments were properly credited to your account, if not, clearing that up will resolve the matter.

Contact your bankruptcy attorney about reaffirming the loan. Technically, the bankruptcy discharged your obligation to pay under the loan contract leaving the credit union with no way to enforce the contract for payments. The repossession is the only way it has to protect its investment now. A reaffirmation will take care of this problem. It is very unlikely that the credit union really wants to take the car as it will almost certainly not be able to sell it at auction for the amount you owe on it and will end up losing money.

One thing I can guess happened is that you did not execute and caused to be filed a reaffirmation agreement on time or at all. Your car lender may be able to repossess even if you are current with your payments if the purchase agreement you signed says that they can declare your loan in default if you file for bankruptcy protection or words to that effect because the 2005 amendments changed the law. After those amendments, Chapter 7 debtors must execute a reaffirmation agreement on time as required by the law. If they do not, Bankruptcy Law allows the provision in the contract that says that bankruptcy is an event of default to be enforced. You need to review your original purchase agreement to see if the car lender is within its rights.

In order to keep the vehicle, you have to reaffirm the debt. It isn't enough to simply keep making your payments.