Credit Union Credit Card - Tricky?

[mhman]

I have a CC card and an auto loan with CU. They sent me a reaffirmation document for the auto loan.

In order to find out any clauses in my auto loan, e.g., Cross Collateral Clause (CCC), I called to a representative at the BK department. But they said that there will be no connections between CC and Auto Loan.

But when I contact "Manager" in the BK department to make sure, he doesn't want to confirm this CCC issue and keeps saying that "You need to consult with your attorney about this. I can't provide any legal advice!"

I told him that CCC is related to CU's policy. But he keeps saying the same repeatedly.

CC debts would never be discharged if I reaffirm the auto loan?

All other CCs in the credit report were closed when I filed BK, but only CU keeps sending the statement for CC. Does this show any CCC issue with CU?

The balance of the Auto Loan is about $5k so I want to reaffirm the loan but the CU manager's vague answers make me confuse. He still refuses to answer and insist that I must consult with my attorney.

Any idea or similar experience?

[mtbc]

If you can't find the terms of your auto loan, you could simply ask them to send you another copy of them. Just asking for another copy of them isn't something they can possibly say is "legal advice".

I'd never heard of reaffirmed secured debt keeping unsecured debt from the same creditor alive, so I'll be quite interested to hear if that's possible.

[StartingOver08]

I also had an auto loan and cc with my CU. To complicate matters further I had a 2nd mtg on my home.

I was able to reaffirm my auto with the CU AND have them specify in the reaffirmation agreement removal of the cross collateralization between my accounts. All the other accounts (2nd mtg and cc) were discharged in my Ch 7 BK.

I was able to negotiate directly with my BK dept of the CU. My attorney did sign off on the reaffirmation (as I did and the CU did) and it was filed timely.

It sounds like your person at your CU is either very new or is trying to bully you into reaffirming the cc debt as well as the vehicle loan. You might want to try to have your attorney conference in a call with both you and he to get the issue resolved. JMO.

[mhman]

I also had an auto loan and cc with my CU. To complicate matters further I had a 2nd mtg on my home.

I was able to reaffirm my auto with the CU AND have them specify in the reaffirmation agreement removal of the cross collateralization between my accounts. All the other accounts (2nd mtg and cc) were discharged in my Ch 7 BK.

I was able to negotiate directly with my BK dept of the CU. My attorney did sign off on the reaffirmation (as I did and the CU did) and it was filed timely.

It sounds like your person at your CU is either very new or is trying to bully you into reaffirming the cc debt as well as the vehicle loan. You might want to try to have your attorney conference in a call with both you and he to get the issue resolved. JMO.

Thanks for sharing your experience.
When I checked the reaffirmation documents, I couldn't see any Cross Collateral Clause on it....

So you mean that it would be possible that the CC would be survived if I reaffirm the auto loan due to CCC.

I'd better contact the manager in the BK department to make this sure.
I sent the reaffirm docs but I would cancel it if there is any CCC problem. Thanks!

[StartingOver08]

When the BK manager states: CC debts would never be discharged if I reaffirm the auto loan? as you indicated in the original post, he is referring to the cross collateralization policy of the CU. That policy is put in place when you open any account at the CU and is extended to each account/loan/cc etc as you open them. If you want to reaffirm just the vehicle loan and discharge the rest of your debt with the CU, then that can be done in the reaffirmation agreement. It really does sound like a miscommunication issue that you and your attorney can work out with this manager.

OTOH, if they will not reaffirm just the auto loan then you have a decision to make.

[mhman]

When the BK manager states: CC debts would never be discharged if I reaffirm the auto loan? as you indicated in the original post, he is referring to the cross collateralization policy of the CU. That policy is put in place when you open any account at the CU and is extended to each account/loan/cc etc as you open them. If you want to reaffirm just the vehicle loan and discharge the rest of your debt with the CU, then that can be done in the reaffirmation agreement. It really does sound like a miscommunication issue that you and your attorney can work out with this manager.

OTOH, if they will not reaffirm just the auto loan then you have a decision to make.

"CC debts would never be discharged if I reaffirm the auto loan?"
This was my question.

Is it really possible that Unsecured debts won't be discharged due to Secured Debts with CCC?......

Another representative mentioned that there is no link between CC and Auto Loan. But the manager who is in charge on BK refuses to confirm the issue that's why I am concerning about CCC.

I will contact the manager as well as my afforney to confirm this issue, and put the results in this thread later.

Thanks a lot!

[backtoschool]

Credit unions are notorious for having cross-collateralization agreements. Some credit unions will make you reaffirm all of your debt if you want to reaffirm your car, some cu's will let you just reaffirm the car. YMMV. I would make sure you know exactly what you are reaffirming and what the cross collateral agreement of your credit union is before you sign anything.

[lrprn]

Unless your lawyer specifically approved you speaking directly to your CU about this, you need to stop talking to them yourself and let your lawyer do the talking for you. That's why you paid for representation when you filed.

SO08 is steering you in the right direction. The chances are quite good that the agreements you signed for your CU loans and cc's make them cross-collateralized. Signing a reaffirmation agreement for the car could well include a clause that you will remain responsible for the cc debt as well. Agree to NOTHING and sign NOTHING until you and your lawyer have talked everything over and he/she has read the agreement and okayed it.

[sjcmCA]

This is very interesting.
Credit card debt (unsecured debt) can survive through BK if there is any clause. Scary!

What would happen if the debtor does "ride-through" for the CU's auto loan? (It means "No Reaffirmation" of the auto loan)
Scenario (1): Unsecured debt will be still discharged and the car title can be released in the future?
Scenario (2): Or the car should be repossessed by CCC even though the auto loan account is current?

It looks CU might screw up everything.

[flyinbroke]

I guess I am weird; I don't mind reaffirming my CU's car loan and credit card. They were good to me, and they are one of the few that I am current on (mainly because of the car but I like this CU as well...they gave CLIs when all others were CLDing, and left my interest rate alone).

I am looking forward to getting rid of the too big to fail banks but never financed anything secure with them, nor banked with them.