20 replies

  1. what if a person dies an administrator as been deemed and the person has a car and visa both are current but now the administrator wants to sell there car can the credit union refuse to release the title to the collateral? Can they legally do that?

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    • I’m licensed in MD and DC, not sure where you are. But generally, the death of a person does not change the terms of a contract. If you notice in my piece, the direct language from the contract I used makes no exception even for death. You need to read the contract specific to that particular car and visa to learn the terms. If you can’t find it among their belongings, just ask the credit union for a copy. Then review and seek the advice of an attorney, that is local to you, to see if there is you have any options. Good luck and thanks so much for reading and asking! Remember to vote!

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  2. I have a credit card, a signature loan, and 2 car loans, Been keeping up with car loans. If I default on signature loan and credit card, will they just keep the titles on cars, or will they repossess cars if credit card and signature loan r not paid off? I’m having to file chapter 7, which I guess does not make a difference at my credit union, because of cross collaterizarion.

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    • Hi Mike, the answer you seek is in contained in the documents you signed, typically identified as the loan application. In the DMV area, I generally see it titled “LoanLiner”. In my experience, I have not seen actual repossession from default on signature/credit cards, but again, read your particular agreement. And you are likely correct, your chapter 7 bankruptcy filing, will likely not affect your debt witht the credit union, unless you decide to surrender the vehicles. Thanks for asking!

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  3. Does this information still apply ifa person files for bankruptcy?

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    • Nadja, I practice in Maryland and DC and the answer here is generally yes, it still applies if you file for bankruptcy. Filing for bankruptcy will not change the terms and conditions of the agreement you signed. However, in a bankruptcy, you will have the option of surrendering the vehicles. This will then, generally get rid of all the debt (assuming some of the debt isn’t secured by something else). But check your particular agreement for the details and discuss thoroughly with your legal counsel! Thanks for asking!

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  4. I am currently in this situation. I purchased and paid off a car loan however due to divorce I defaulted on a credit card. I was wanted to sell the car but the credit union has a lein on the title. The car is no where near the amount owed for the card. Is there anyway possible to sell this car?

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    • I practice in the State of Maryland and the District of Maryland. Unfortunately, the goal is to not provide you with clear title until all the debt is paid. Thus, generally speaking, they won’t release the title unless you payoff all related debt, new or old. Of course, if the car is paid off, you can sell the car and use part of the proceeds to immediately payoff the credit card in order to request clear title for the new purchaser. The purchaser will have to be flexible however, since some credit unions take a few days process the payment and mail you the title. Good luck!

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  5. If I took out a auto loan at the credit union. At a later date took out a line of credit at the same credit Union. I paid off the auto loan but the line of credit got charged off due to default. Can the credit union re possess the auto?

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    • Troy, It’s possible, but depends on what your auto and line of credit contract says. When we talked you indicated that you were in Minnesota with a contract in NY. I’m not barred in either of those states, but I would start with the contract itself. Good luck to you and thanks for reading and contacting me!

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  6. Does this apply if 1 of the vehicles is totaled by insurance and insurance pays off,,,,,and can they take more that is owed on that car?

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    • Possibly, if there are other existing debts, credit cards and/or loans attached to the car. Typically, any debt is paid in full up to the amount of the debt, but insurance companies typically payoff a car debt up to the value of the car, which is not always the actual payoff amount the loan. The bottom line is that it depends on what your contract says. You need to spend some quality time and read it or seek legal counsel to read it for you. Thanks for commenting.

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  7. Sharon, I’m in Md and have the same situation you mention above but my car loan with that verbiage on it is now paid off. I’m in the process of filing bankruptcy on the credit card with the same institution. There is no paperwork accept an application for the credit card, but they claim they still cannot release the lien on the car. The question my lawyer and I have and that the credit union is taking it’s good old time answering is – Is that credit card now considered “secured”, thus putting roadblocks to the Chapter 7 case?

    Thanks,
    cybrscrybe

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    • You’ll have to read your particular contract, but I’ve had clients stuck in the exact situation! They’ve had to decide if the car was worth keeping it surrendering! Good luck.

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  8. i am currently in this situation. i filed bankruptcy, was advised by my lawyer if we wanted to retain car continue payments. When i called the bank to get the title they advised i still owed them money and would not release the title. When i checked the “security agreement” it states cross collateral verbage. when i called my lawyer, he says, oh, you must bank with a credit union, they are notorious for that. If you know that, why don’t you proactively ask your clients who they bank with. he now wants to charge me more money to reopen my bankruptcy case. in my opinion he as a “bankruptcy lawyer” was negligent. and should reopen at no cost. he continued to say, it may or may not make a difference. would my attorney have any responsibility or would i have any lawful recourse?

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    • That’s a difficult question for me to answer without knowing your entire financial situation, both before you filed bankruptcy and what benefits/losses you ended up with post bankruptcy in addition to not knowing what all was asked of you and what all was actually disclosed with regard to each and every question. Call your attorney and share your exact thoughts with him and see if he won’t reconsider his position or reduce the cost. Good luck.

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  9. Hi, I have a cc with my credit union, and later a car loan. I got disabled and got behind on my CV payment and when collections called he said my car was attached to my CV loan and they could take it. That was a couple years ago. I recently paid off my car a couple months ago and was able to get a copy of my title, there were no liens attached. So my question is if I default on my cc can they come after my car? I am currently homeless and disable still.

    Thanks

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    • Hi Laverne and thanks for reading! You’ll have to read your contract and talk to an attorney in your state, but based on the article I wrote and the jurisdictions where I practice, it could sure be likely.

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  10. I have an auto loan that I refi at a different bank, a credit union, but now the original bank wont release the title because of a very small promissory note they didnt include in the payoff a month ago. They used the vehicle as cross collateral and the credit union may not be able to redo the loan, because with the additional amount it doesn’t fall under their quals meaning it will all unravel….is there anything I can do?

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    • Hi Jennifer, seems your issue is further complicated with the fact that there are two lending institutions. Thus you should seek legal counsel in the state where you live so that a professional can carefully review your documents and give you a conclusive answer. Good luck!!

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