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My Credit Union Won’t Give Me My Car Title Because I Have a Credit Card Balance

“Dear Steve,

Worked for this credit union who in the past had federal investigators in when there were bogus loans. Worked there for 15 yrs.

I paid my car loan off with my credit union but they won’t give me the title. I owe on a visa account there and they are pulling the cross collateral trick.

Thing is I worked there and they classify all the visa and mastercard loans to the feds as “unsecured”.

How can they do this when “technically” they are when using the cross collateral line?

When I got the visa is was listed as unsecured in the file because I saw the approval from the VP of lending.


Dear Rhonda,

The cross collateralization trap is a nasty one. But it seems it would be more of a accountholder agreement issue then a bank reporting function.

Black Leather Flogging Whip and money on white background. Not iIf you feel the credit union is being unfair or breaking the law and they are a federally chartered credit union then you could file a complaint with the Office of Consumer Protection at NCUA, click here.

State-chartered credit unions are regulated at the state level.

One way to break the cross collateral in some cases would be with bankruptcy. But in your case the car is paid for and the unsecured loan is using the car title as collateral. If you discharged the unsecured loan in bankruptcy the credit union could ask for the car as collateral.

If you were still maxed out on the car loan and the credit union credit card debt you could include both in bankruptcy and discharge the credit card debt and reaffirm the car loan and pay that back.

It seems the best approach at this point would be to either negotiate a settlement with the credit union or get on a payment plan to satisfy the credit card debt. Otherwise it seems your options leave you exposed to losing the car in a bankruptcy.

I wish I had better news but this credit union cross collateral issue is just some nasty crap that catches many.

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

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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.

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