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Car Title Being Held by Credit Union Even Though It is Paid Off. – Nicole

“Dear Steve,

I am having an issue with a current creditor.

I recently paid off my vehicle through my credit union. It has been a month and i called them asking about my title to the car. I have not received it yet.

I was told they are holding it as I am one month behind on my primary personal loan and can’t release the title until I bring this up to date. I am planning on filing BK… my atty is saying that can’t do this and that my chapter 13 would require them to release it. Why is my creditor doing this then??

Nicole”

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The Answer

Dear Nicole,

They are doing it for the same reason rock stars date models, because they can.

Credit unions practice this sneaky little technique of cross-collateral where they links all your assets held with them and hold them hostage if you are in default in another area. That’s something that banks do not do.

It seems the credit union can do this now but would have to release the title after you file bankruptcy since the underlying debt would be discharged.

I’d go back to your bankruptcy attorney and have a chat about this cross-collateral problem with credit unions and see what can be done to release it quickly after you file.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Car Title Being Held by Credit Union Even Though It is Paid Off.   Nicole
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Steve Rhode

    If asked, I’d tell them you are going bankrupt. No need to hold back on that information.

    The situation and experience are frightening for you becuase this is all foreign. The good news is that it is a path that has been traveled millions of times before, literally.

    Rather than dread every moment, be an observer, living outside of your skin. Take in the experience and be in the moment.

    Just remember, no matter how bad the moment may feel, it could always be worse. At least you are not on fire.

    Big hug.

    Steve

  • Nicole

    Thank you for your input Steve. My kind credit union is no longer kind to me at this point. One of the manager said today “Nicole, you have always been in good standing with us, are preparing for bankruptcy?” I didn’t admit to anything, but rather found they are asking for back payments to bring current loans to date..in order to release the vehicle’s title. Which contradicts what they told me “that the car is cross collateral”. Is this just confusing or what? Off the the attorney I go. I am so worried! The last thing I need is another car payment because they have taken my car which is my livelihood!

  • Nicole

    Thank you for your input Steve. My kind credit union is no longer kind to me at this point. One of the manager said today “Nicole, you have always been in good standing with us, are preparing for bankruptcy?” I didn’t admit to anything, but rather found they are asking for back payments to bring current loans to date..in order to release the vehicle’s title. Which contradicts what they told me “that the car is cross collateral”. Is this just confusing or what? Off the the attorney I go. I am so worried! The last thing I need is another car payment because they have taken my car which is my livelihood!

    • http://GetOutOfDebt.org Steve Rhode

      If asked, I’d tell them you are going bankrupt. No need to hold back on that information.

      The situation and experience are frightening for you becuase this is all foreign. The good news is that it is a path that has been traveled millions of times before, literally.

      Rather than dread every moment, be an observer, living outside of your skin. Take in the experience and be in the moment.

      Just remember, no matter how bad the moment may feel, it could always be worse. At least you are not on fire.

      Big hug.

      Steve

  • Steve Rhode

    You really need to discuss this with your bankruptcy attorney.

  • Nicole

    I am confused a bit. Are you saying if I declare chapter 13 as planned, they HAVE to release my title? Or.. should I just pay the loan’s payment x1 bring it to date then declare bankruptcy? Which would be easier??

  • Nicole

    I am confused a bit. Are you saying if I declare chapter 13 as planned, they HAVE to release my title? Or.. should I just pay the loan’s payment x1 bring it to date then declare bankruptcy? Which would be easier??

    • http://GetOutOfDebt.org Steve Rhode

      You really need to discuss this with your bankruptcy attorney.

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