Cross collaterization AFTER bankruptcy?

[TXskyblue]

Ch7 has discharged and closed. Credit union owns my mortgage. Never late, has equity. Did not reaffirm but am doing stay and pay. No credit cards, auto loans, or any other loan with this credit union.

I am aware of cross-collaterization thanks to this forum and I moved my checking and savings to another bank so they wouldn't grab it when I filed.

Now that the chapter 7 has discharged, can I start using this credit union again for checkings and savings? They have always been great to me and I would much prefer to be using them again.

[justbroke]

I would not put it past any credit union to attempt to cross-collateralize debt. However, that specific debt (mortgage) was discharged. Should the CU attempt to cross-collateralize "new" debt with the home, that would be very interesting.

I would say that your particular CU is being nice since they allowed a stay and pay. I have not read about ONE credit union that allowed a stay and pay! This is telling me that this particular CU may just like you and your business. Now, that does not mean there could be issues and misunderstandings in the future regarding this discharged debt, but you can cross that bridge later.

[stevie2012]

Oh good question. My attorney advised me to close mine down - period. Just to avoid any set-off. I have no idea for sure though once you are discharged. I know I would not chance it.

[TXskyblue]

I would say that your particular CU is being nice since they allowed a stay and pay. I have not read about ONE credit union that allowed a stay and pay! This is telling me that this particular CU may just like you and your business.

My CU sent my lawyer some reaffirmation papers but I never signed them. I haven't had any discussion with my CU about my mortgage.

I am current on the mortgage. Owe about 90K on it. I have equity as well.

Are you saying that CU's will foreclose on a current mortgage with no reaffirmation? I am already discharged and closed.

[Drazil65]

You always run a risk that a financial institution could foreclose at any time unless you sign a reaffirmation with them. BUT, typically a bank anyway (not familiar with CU), will more than likely let you stay and pay with no problems as long as you pay on time etc. Why would they rock the boat as they are getting their money especially on discharged debt.

[justbroke]

Please remember that a bank, CU or not, must follow your State's underlying non-bankruptcy laws when foreclosing. That means that you must be in actual default at the time. Not signing a reaffirmation agreement is not enough. The CU or bank would need to go to the BK court and "force" you to abandon the property. I have only seen this (read about this happening) twice in Florida. It is typically the real small community bank or CU that complain to the BK court.

If you are already discharged and the CU didn't fight your non-reaffirmation, it's typically a sign that they are allowing a stay and pay.

[kornellred]

TXskyblue - why even bother to start using (or should I say: re-using) the credit union that owns your mortgage for any other financial transactions? Cross-collateralization is essentially "de-rigeur" with credit unions, and with very good reason (which is another subject entirely).

Leave well enough alone.

[TXskyblue]

This is a fantastic credit union. Head and shoulders above the rest in the area. They've bent over backwards for me in the past. I really like this credit union.

[AngelinaCat]

This is a fantastic credit union. Head and shoulders above the rest in the area. They've bent over backwards for me in the past. I really like this credit union.

That is exactly the reason that my husband wanted to stay with ours. Plus, he had been with them since 1964.