So I have seen a few posts on here in the past about Credit Unions and Cross Collateralization. My good friend who filed Ch 7 and was recently discharged, I believe called me as he paid off his car and when I did not receive his title was informed of the Cross Collateralization issue. Unfortunately he had an overdraft line($400m), a CC($1k), and 2 car loans. His biggest debt by far is one of the car loans where he is likely underwater $5k+. I reviewed all the loan docs, finding the standard LoanLiner documents many CU's use.
The catch and my question is, the large car loan was actually not originated through the CU. It was originated through the dealer, who sold the loan to the CU. No CU loan docs. The Standard Finance Contract from the dealer simply states "You are giving a security interest in the vehicle being purchased".
So while the second vehicle that unfortunately had the equity in it and was just paid off appears to be tied to the CC and LOC amount due, it seems that the larger loan and it's pending deficiency would not likely be tied in? The only question is the the CU Loanliner language refers to CU debts, so simply by assuming or buying the loan does this document apply?
The catch and my question is, the large car loan was actually not originated through the CU. It was originated through the dealer, who sold the loan to the CU. No CU loan docs. The Standard Finance Contract from the dealer simply states "You are giving a security interest in the vehicle being purchased".
So while the second vehicle that unfortunately had the equity in it and was just paid off appears to be tied to the CC and LOC amount due, it seems that the larger loan and it's pending deficiency would not likely be tied in? The only question is the the CU Loanliner language refers to CU debts, so simply by assuming or buying the loan does this document apply?