5 days to my 341 hearing and I get some bad news. I have a car loan with a credit union, owe $3,611, car is worth about $4,000 and in good shape. When I bought the car, the loan agreement included cross-collateralization with my credit union Visa, which I'm discharging a $11,000 balance on in my Chapter 7.
I was all set to reaffirm the $3,611 when the credit union came back saying the loan is really for $7,811 "including cross-collateralization." Apparently they're willing to repo on a performing loan to try to squeeze an extra $4,200 out of me for the Visa. I can't just ride it through, because the $7,811 is what I'll have to pay off before they'll release the title, and the car isn't worth it.
My attorney says there's no way to force the credit union to strip out the cross-collateralization. I'm sure some bean counter has figured out that for every repo they have to do, they'll also get one creditor to pay the full cross collateralized amount to make up for it. The $4,200 wasn't just pulled out of their butts.
Atty suggested a 722 redemption loan, but my car is a 2003, and 722redemption.com only redeems 2004 or newer. Anybody know of other 722 lenders who do back to 2003? Any chance the credit union will change its mind as the discharge gets closer? Other suggestions? When should I stop paying on the car? My so-called fresh start is about to be launched with a 20% interest loan on a newer car that I don't want and need to buy.
I was all set to reaffirm the $3,611 when the credit union came back saying the loan is really for $7,811 "including cross-collateralization." Apparently they're willing to repo on a performing loan to try to squeeze an extra $4,200 out of me for the Visa. I can't just ride it through, because the $7,811 is what I'll have to pay off before they'll release the title, and the car isn't worth it.
My attorney says there's no way to force the credit union to strip out the cross-collateralization. I'm sure some bean counter has figured out that for every repo they have to do, they'll also get one creditor to pay the full cross collateralized amount to make up for it. The $4,200 wasn't just pulled out of their butts.
Atty suggested a 722 redemption loan, but my car is a 2003, and 722redemption.com only redeems 2004 or newer. Anybody know of other 722 lenders who do back to 2003? Any chance the credit union will change its mind as the discharge gets closer? Other suggestions? When should I stop paying on the car? My so-called fresh start is about to be launched with a 20% interest loan on a newer car that I don't want and need to buy.