Chapter 7; Credit Union.

[BKQuestion]

I am at the 60day mark after my 341a. I had no reaffs with my 2 home mortgage companies, which i am told relieves me of personal liability if the home was sold/foreclosed on, however to retain ownership i must continue to pay, which I have and always will; was never late on payments either. My question comes down to a vehicle loan which was taken out on a new car 2 years ago with my credit union which has an open visa credit line of $4500. Payments have not been made on for over 8mos now on the credit card. The car loan on the other hand has had each and every payment made in full and on time. I signed the reaff for the car loan, my attorney said it is normal for a credit union to put in witting that they are going to hold the debtor to the cross-collateral clause should they reaff 1 credit line or another, however he has heard nothing back from them. In fact the attorney for the credit union was clueless to such a clause... He has contacted them (2) with very detailed questioning about their intent to enforce the clause with no luck of a return phone call. I am no upside on the loan as i placed a large amount down, and got a great APR of 5.49, so its truly in my best interest to reaff, however anyone heard of a credit union not enforcing the clause, my lawyer said its surprisingly common here in florida esp. with the car market as they will never see the money if they dont waive it.

Sorry for the long ramble, i am very stressed over this ordeal as it was medical bills in excess of 60k after a brain tumor was found at the age of 21...

Any information or first hand knowledge is very appreciated

[myid4u2c]

Why would you reaffirm anything? Just keep paying on your cars like you are with your house. I doubt the cu will take the car back.

[BKQuestion]

I am told if you keep paying on the car but not on the credit line they can LEGALLY ttake the car, b/c of cross col lateralization. theoretically you could pay the car off yet still have the surmounted credit card debt and they DON'T have to relinquish the title.

[mintz]

I am in the process of trying to get a loan with another bank on my auto and get it away from my CU just because of this

[BKQuestion]

I had my 341 back on Dec1st so its a matter of a few days before this is discharged... I have the reaff but am hoping to have the CU attorney add non cross-collateral lanuguage.

Is it like the home loan, when reaff a car, I can keep paying and using the vehicle, and they CANT repo?

[southernbelle]

I am told if you keep paying on the car but not on the credit line they can LEGALLY ttake the car, b/c of cross col lateralization. theoretically you could pay the car off yet still have the surmounted credit card debt and they DON'T have to relinquish the title.

I have a 2nd mortgage and 2 additional loans with the same bank (a visa and signature loan) and my first hand experience with cross collateralization is: since I want to keep my home, I have to remain current on all 3 loans or they will start foreclosure since I didn't reaffirm. The loan officer told me that information when I stopped paying unsecured's before I filed and I had to bring all 3 loans current before they foreclosed. I didn't remember such a clause until I went back to read it and low and behold she was 100% correct.

The ironic part is the fact that the signature loan was obtained to keep current with business debt I owed and I ended up closing the business anyway and the visa was used to replace my broken a/c. If I gave them the house I'd be in a better situation. I don't owe much more on the signature loan and all 3 loans have good interest rates so the monthly payments aren't much. In hindsight I wished I would have keep current with the credit card payments because they might have let me keep it to help rebuild my credit since I'm paying them back anyway, but the BK dept of that bank are really rude so probably not.

I would have been better off if I didn't care about the house and just let them take it, but it would have been hard to find another one for this price in a decent neighborhood and with bad credit, my payments would have skyrocketed. Basically be very cautious of cross coll. clauses because they are dangerous.

[BKQuestion]

Contacted the lawyer yet again, was told that there is the clause that binds the loans togehter until BK. Now after filing if they wanted to hold me to the other loans they would have to bring reaffs for them to. and bind them together, since i was only given the reaff for the car and not the credit card, that should they not rescind the deal before the case is cloased and discharged that i have the grounds should they refuse to relinquish title at a later date when only the car payments have been made.

Sounds too good to be true, i think..

[Silver26]

I am having these same issues with my CU and car, Owed 7500 on a CC and have and continue to pay my car loan with them. Its also in my best interest to keep the car as I'm not upside down on it and we only have one car.

They can legally come at anytime before i file and repo my car because I have caused them a loss. I'm glad you brought up the point about them holding the title even with the reaffirm. I'm going to have to ask my attorney about that one. I cant imagine that would be the case. Since the CC debt is discharged and your signing something new with them. As long as you don't agree to Cross Collateralize initially i don't think the CC can come back to haunt you later on. We have at least one bargaining chip that i hope will work in our favor, my father has agreed to let us use his extra car if they pull any crap. The car part has been the most stressful part of our BK Ive definitely learned my lesson about reading all the small print with everything i sign. Had i went with a regular bank i would have never had this issue. Sorry for the long post.

[BKQuestion]

Yeah i agree, i learned my lesson.

[southernbelle]

I learned too. Hindsight is always 20/20. Never again.

[shabam]

Sorry for the long ramble, i am very stressed over this ordeal as it was medical bills in excess of 60k after a brain tumor was found at the age of 21...

Any information or first hand knowledge is very appreciated

First of all if you had a brain tumor the last thing you need to be is stressed.

Just relax, then wait and see what happens. One step at a time.