Can My Credit Union Refuse to Give Me My Car Title?


Dear Steve,

My credit union is holding my car title hostage for an unpaid charged off visa.

Ok, the vehicle was paid off 6 years ago, the car is no longer registered because it needs a new transmission, I refuse to dump anymore money into a 12 year old car, I can’t junk it because I don’t have the title, Can I call the credit union and tell them to come get it or send me the title to junk it..what are my options please.



Dear Shelley,

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

You are not going to get the title. Credit unions engage in something called cross-collateralization where they will hold any assets until a bad debt or another account is paid off.

When you financed the car there was probably a clause in the agreement that said the credit union would have a lien against the car is any of your other accounts fell behind.

If you have other debts you might just want to consider filing a consumer bankruptcy and give the car back to the credit union. The bankruptcy would eliminate your obligation on the car, the bad card debt, and other consumer debt you may have.

At the very least you’d be able to break free from this mess.

And this is a recommended strategy. As attorney John Lee says, “Normally the best option, the debtor can surrender the car back to the credit union in the bankruptcy and have all debts, including credit cards and installment loans, discharged in the bankruptcy. Normally, this is the best option because the credit card debt is so high it is not worth trying to pay it back.”

If you have additional debt I would suggest you meet with a local bankruptcy attorney for free and discuss your situation.

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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