Credit Union Vehicle Reaffirmation question

[Evanliddiard]

Filed Ch7 Nov 2018. Had two vehicles and a credit card with a credit union. We had decided to reaffirm under an agreement that they would not be cross collateralized and that payments would be reported to credit agencies. The CU didn’t accept reaffirmation (without our knowledge). We continue making payments on the autos and just think the CU is lying bastards for never helping the credit report.
Fast-forward to 2020. We pay off one of the cars. We ask for the title, and are told that while we paid it off and it is ours, we can’t have the title unless we pay off the other car and the discharged cc. They cross collateralized.
our question: if we tell them to just take the car we still owe on, can they take both vehicles? I know I won’t get the title to the one, but can they take it?

[justbroke]

First, welcome to BKForum!

I need to first get clarification as to what you mean by the CU didn't "accept" reaffirmation? Did you actually sign a reaffirmation agreement? Did your attorney file that reaffirmation agreement with the court? (Whether you actually signed a reaffirmation makes a big difference.)

Sine I can't answer any of your questions until the reaffirmation agreement "signature" question is answered, I will defer the answer(s).

[Evanliddiard]

We signed the reaffirmation agreement with our lawyer, 3 weeks after our hearing. It was sent back to the CU for filing, and they never filed it (b/c, according to them, our lawyer modified it in an unacceptable manner to them). Yes, it was signed, but never filed.

[justbroke]

We signed the reaffirmation agreement with our lawyer, 3 weeks after our hearing. It was sent back to the CU for filing, and they never filed it (b/c, according to them, our lawyer modified it in an unacceptable manner to them). Yes, it was signed, but never filed.

I would double check that it was never filed. In fact, I would go back to my attorney. If you never properly reaffirmed the vehicle(s), or didn't file the reaffirmation, then the debt may have been discharged. If that's the case, then the credit union (CU) may be correct in that the debt is still as it was before filing, although your personal liability to pay has been discharged.

Since this would mean there was no reaffirmation of the debt, then any cross-collateralization would still exist. That would mean that the CU has a lien against all your vehicles that you financed through them (the cross-collateralized vehicles).

You'll have to go back to your attorney for the final answer. But, I think that the CU still have a valid lien. The reason that the CU never reported your payments to the credit bureaus, is because the debt was discharged in the bankruptcy; as there was no (enforceable) reaffirmation of the debt. They actually did what was required under the law. Your recourse is through your attorney to explain why they -- your attorney -- never ensured that the reaffirmation was accepted (and filed). Unfortunately the CU has a valid lien against both vehicles which appear to be cross-collateralized with credit card debt.

[Evanliddiard]

Have double checked with both CU and attorney, both agree that the reaffirmation was not filed. Not sure if I’ll get a real picture of why. So the cross-collateralization exists, meaning if I don’t keep paying on the one, they can take both...and that I won’t get either title until all debt is paid...even though I no longer have the legal obligation to do so. Does that seem like a fair summation?

btw, thank you for your prompt advice

[justbroke]

What you wrote is an accurate summary. Because your personal obligation to pay the debt was discharged in the bankruptcy (because the reaffirmation agreement was never accepted and filed -- all of the liens still exist. The CU's recourse, should you decide to stop paying, is to take any State non-bankruptcy action against the property you pledged. Whether that means they can directly repossess the "other" vehicle is a legal question I can't answer.