Cross Claim from Credit Union on truck...

[Licoriceky2]

OK, any thoughts on this...you guys are so much more helpful than my attorney.

Short of the matter...we bank(ed) with a local credit union. My husband has a Visa credit card through them and has has it for years. Last year we refinanced his truck through the credit union.

We are current on the truck payment, however as per our attorneys advise we have not paid the CC (including the Credit Union one) in about three months.

A month and a half ago, the credit union called and said that the credit card is secured, as the truck serves as a "cross-claim" on the card. I forwarded the information to my attorney as this was the first we had ever heard about this. He told us not to worry that we would include both the card and the truck in the 13, however "at some point" we should consider changing banks. What he failed to tell us, was that Credit Unions are notorious for freezing accounts to capture funds for past due accounts. This happened to us, luckily we only lost $11.

HOWEVER, we received yet another rude call from the local credit union telling us they were "making sure we understood that the truck served as cross collaterial" on the credit card and we were very deliquient on the visa. My husband said he understood, we were filing 13, and that no, we did not expect a 100% payback.

Well now, we are GREATLY concerned that perhaps that Credit Union is working to reposess the truck. Can they do this since they are a Credit Union and this served as cross collaterial even though we are current on the truck? Anyone have this happen or have advise? My attorney, of course, has yet to return a call or email...

Please help as we are worried...THANK YOU!

[SMinGA]

Yes they can do it. Its common for CUs to cross-collateralize, meaning assets back credit accounts. If you're behind on the card they may move to repossess the truck. How long until you expect to file? Once you have filed, the automatic stay means they cannot repossess. If they repossess before you file, I am not sure what rights you would have to get the truck back.

I am not sure if you'll end up having to pay the CU card in full as part of the ch. 13. If you bought the truck more than 2 1/2 years ago, it is perhaps a moot point as you can 'cram down' the secured part of the loan to match the value of the truck and the rest gets treated as unsecured.

In the meantime - keep it parked in a closed/locked garage. The repo man cannot open the garage legally. Be wary if it is parked at the grocery store, work, etc.

[LadyInTheRed]

My husband said he understood, we were filing 13, and that no, we did not expect a 100% payback.

Don't give your creditors so much information. "I am unable to pay anything right now" is what I said. Then they'd ask why I can't pay. "I don't care to discuss the details. I can't pay anything right now. I hope to know more in 30 days."

Have you retained the attorney yet? If so, give creditor's his name and phone number. If not, you may want to consult with a couple of more if you don't find him helpful.

[debtinohio]

Yeah - my credit union who I owe 20K on a credit card holds my truck note too for which I owe $32000. That credit card was the only one I kept pretty current and blindsided them with the 13 filing

Interesting enough, they only have 21 days left to file a claim on either.

Keep it locked up like SM says or pay the credit card bill.

[Licoriceky2]

Thank you both so very much! Its locked up safe and sound! Yall are awesome!

[catleg]

Remember, logic in a 13 is a little bit upside down.

It really doesn't hurt you if they treat your credit card account as a secured claim on your truck, just so long as there is enough money in the unsecured creditors "pile" to cover that account.

It just means that the credit card gets first dibs at the money in your plan, ahead of other unsecured creditors and will get 100%. As long as it doesn't result in your plan payments not covering your priority and secured debts this is a don't care issue for you.

The plan payment is based on your ability to pay (disposable income), so shifting them from the unsecured pile to secured pile doesn't hurt you.

So you can be honest with them about filing a 13 (but still keep it locked up until then, just in case).

[Crozier]

We had the same issue. Our CU went as far to say they would refi our car after our 13 plan was confirmed, to a more manageable payment. During the confirmation hearing, they argued for about 15 mins about cross-collateralization, etc., etc. I am not exaggerating, as soon as we were confirmed, literally that night, they showed up at 1 am to repo the car.

Luckily, it was parked at my job, saving us the embarrassment of the repo. I surrendered the car the next day in a more discreet manner. CU's are ruthless during BK proceedings. Prior to this episode, they said yes to everything.

Like I told DW, we can get another car...being badgered by the CU, is not worth it.

Good Luck Licorice. . . I know it's tough, but it is manageable.

[Nanzee]

How were they able to repo your car after you were confirmed? We will be done with payments in two months on my credit-union car loan. A line of credit is from them is also part of the bankruptcy. They did not object to confirmation - the only one who did was the 2nd and then they agreed to the strip. I certainly hope they cannot repo my car after we are done paying it off. What would be the procedure for that?

[debtinohio]

The CU must have filed a motion for relief from stay to repo thier car as it sounds like they were voluntarily surrenduring it as part of the plan anyway.

[newbie2]

This has always befuddled me about the Chapter 13 & cross collateralization. We owed our credit union a secured debt (a vehicle) and on an a credit card.

The vehicle was paid outside of the plan, and the credit union is receiving the same percentage as other unsecureds.

Now they did kick up their heels a bit when the car was paid off and didn't want to send the release of the title, but we waited a couple more months, called and asked "When are you going to send it? It's been paid off for X months?" and they did.

Did we not have to pay the unsecured credit card 100% because the credit union didn't specifically ask for it?

[catleg]

They probably needed to file the credit card as a secured claim and blew it.

[becky20]

We have a 2nd mortgage, 2 car loans, and a credit card with our CU. Ended up giving up the house, the two car loans were crammed, and the credit card was included in the bk. I asked about the title and the attorney said we may have to fight with them to get the title when it's paid off but we'll eventually get it Thanks for this thread, it was helpful to confirm what our atty said.

[newbie2]

They probably needed to file the credit card as a secured claim and blew it.

Makes sense. Kind of ironic though as they were the only creditor to show up at the 341. (They challenged the equity in our house..stupid really, as our documentation was sound.)