Chapter 7, co signer and cross colateralization??

[Mikec75]

Here is my situation..
I filed a no asset chapter 7 on April 1st... I have several unsecured loans accounts that are being discharged with a local credit union in Texas.

I co-signed the loan for my sons vehicle at the same credit union although I'm not listed on the title or registration.
I have spoken to the CU's BK department about reaffirming his car loan and they told me it wasn't necessary as the liability reverts to him anyway since he didn't file.
The account is current, always has been and will remain that way..
Here is the kicker.. They told me today that although they will not repossess the car as long as he stays current that due to my consigning and their cross colateralization clause within the contract that although it won't be repossessed if he stays current that even when it is paid off they will never release the title to him.. Keep in mind, I am NOT the owner nor am I listed on the title..

What options do I have here other than having him keep paying on it, pay it off and drive it until the wheels fall off as without a title it's useless?

In the grand scheme of things, it's not a huge deal I guess because when it's paid off it wouldn't be worth more than a few thousand dollars anyway..

Thanks in advance,

[justbroke]

They are required by law, under every State that I am aware, to surrender the title within so many days (typically 10-30) of a client paying off the underlying loan (period). If they don't release the title, then they would be in violation of probably your bankruptcy injunction as well. Your son should almost certainly have recourse under your State's non-bankrutpcy laws.

For example. in Florida, our law is as follows...

If the lienholder, upon satisfaction of the lien and upon demand, fails or refuses to furnish a satisfaction of the lien within 30 days after demand, he or she is liable for all costs, damages, and expenses, including reasonable attorney’s fees, lawfully incurred by the titled owner or person satisfying the lien in any suit brought in this state for cancellation of the lien

I would hope that Texas is similar.

[Mikec75]

Thanks for your help, I was baffled at their intent to not repo the car, continue to accept payments with intention of not releasing title.