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??


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.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

8 thoughts on “Car Title Being Held by Credit Union Even Though It is Paid Off. – Nicole”

  1. 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.



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