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??


Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

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.

Damon Day - Pro Debt Coach

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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.
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