Cross-collateralization

[lwh1961]

I buried this in another post but I still am looking for an answer.

Is the reason Ch13 works because they get paid for a portion of their credit card and they consider the credit card paid in full?




Quote:
Originally Posted by GotNoMoney View Post
This is what the point of a cross collateralization clause is, if you BK against the CC then they have the right to recover against the vehicle....

Here read this, and again get a real attorney. People on these forums just don't know enough to give sound advice.

http://www.allmandandlee.com/bankrup...t-union-loans/

Like I said before, you may have to file a Ch13 to make it work. At this point it is a $400 gamble that is might slip past them....other than that, no you can't BK against the CC debt and take the car....that is the whole point of a cross collateraliazation clause.


Thanks

[moonbeam9209]

I understand how this works, but is there anyone out there who has filed and worked out a deal with the credit union during Chapter 7?

Like say the car was paid off and they still owed on the credit card more than the cars value? Is it possible that you can get them to reduce the balance on the credit card to reflect and amount closer to the value of the car?

[coolmom04]

I may be missing info here or not understanding the question asked.. I can't get the link above to work.. but are you basically saying that you have a cc with a credit union and own a car outright, but are worried the CU will take the car that you own outright just b/c you owe the CU money?

We just filed Ch7. We have a cc through a CU that also financed our car (that we now own outright and have the title) and they financed our van. We replaced the van b/c we intended to keep it at the time b/c we know the CU would take the van due to the cross colateralization clause, but we have not once been concerned about them taking the car that was also financed through them b/c they have no claim to it now.. it's paid in full and we owe them nothing on it. The attorney isn't worried about that either. Now, when we still owed them money on the car, we THOUGHT they wouldn't send us the title to the car until the cc was paid off, but they didn't - we got the title in the mail less than 1 month after the car was paid off.

How in the world could they take a vehicle from you that you already paid for and you now own outright just b/c you still owe them money on the cc? Unless they are holding the title? Do you have the title to the vehicle?

Am I missing something?

[lwh1961]

Sorry..that link was buried in another thread and I just copied it. Here is a better one (I hope)


http://www.allmandandlee.com/bankrup...t-union-loans/

My car is financed with NFCU. I also have a credit card there that I will include in my bankruptcy filing. If I continue to pay on the car I won't get the title to the car until I pay off the credit card balance.

The link that I posted above seems to suggest that a Ch13 is a way around that clause and I was just wondering if anyone knew how it worked.

[coolmom04]

Sorry..that link was buried in another thread and I just copied it. Here is a better one (I hope)


http://www.allmandandlee.com/bankrup...t-union-loans/

My car is financed with NFCU. I also have a credit card there that I will include in my bankruptcy filing. If I continue to pay on the car I won't get the title to the car until I pay off the credit card balance.

The link that I posted above seems to suggest that a Ch13 is a way around that clause and I was just wondering if anyone knew how it worked.

Oh okay - I'm sorry my answer doesn't help you And the link does work now.

[jennagirl]

NFCU info

We filed bk Feb. 2010, just had our hearing on this past friday 3/19. We have TWO cars with NFCU and had a 17k ccard with them. They reaffirmed on BOTH cars and we were still able to file bk and discharge the cc debt. They told us since we had never missed a pmt and were always one time that they had no reason to take the cars. One of them was even worth several thousand more than we owe...so you might just want to check with them and see.

we were very nervous that they would take our cars too since we still owed a good bit on them and we included the credit card in our bk. But...everhthing is fine and done. We are just waiting for our discharge papers to come in a month or so. Our attorney told us SEVERAL times that NFCU would NOT let us keep the cars, especially both of them...but they did! So you won't really know until you talk to NFCU. They were very nice and understanding about it all. I think because the economy is so bad right now, they just want to get what money they can too.

[coolmom04]

We filed bk Feb. 2010, just had our hearing on this past friday 3/19. We have TWO cars with NFCU and had a 17k ccard with them. They reaffirmed on BOTH cars and we were still able to file bk and discharge the cc debt. They told us since we had never missed a pmt and were always one time that they had no reason to take the cars. One of them was even worth several thousand more than we owe...so you might just want to check with them and see.

we were very nervous that they would take our cars too since we still owed a good bit on them and we included the credit card in our bk. But...everhthing is fine and done. We are just waiting for our discharge papers to come in a month or so. Our attorney told us SEVERAL times that NFCU would NOT let us keep the cars, especially both of them...but they did! So you won't really know until you talk to NFCU. They were very nice and understanding about it all. I think because the economy is so bad right now, they just want to get what money they can too.

That's really great!! I'm glad they worked with you.

[jennagirl]

g

[lwh1961]

We filed bk Feb. 2010, just had our hearing on this past friday 3/19. We have TWO cars with NFCU and had a 17k ccard with them. They reaffirmed on BOTH cars and we were still able to file bk and discharge the cc debt. They told us since we had never missed a pmt and were always one time that they had no reason to take the cars. One of them was even worth several thousand more than we owe...so you might just want to check with them and see.

we were very nervous that they would take our cars too since we still owed a good bit on them and we included the credit card in our bk. But...everhthing is fine and done. We are just waiting for our discharge papers to come in a month or so. Our attorney told us SEVERAL times that NFCU would NOT let us keep the cars, especially both of them...but they did! So you won't really know until you talk to NFCU. They were very nice and understanding about it all. I think because the economy is so bad right now, they just want to get what money they can too.

This makes me feel better. Did you file CH7 or CH13? thanks

[jennagirl]

We filed ch. 7. IF I were you I would call NFCU and talk to their bk department. It gave us such a peace of mind once we talked to them and knew we could keep our cars!

[SleeplessMI]

I'm in the same position as you, Jenna. What was your attorney's reaction when you called the credit union yourself? If I thought it would get me anywhere, I'd bypass my attorney, but I don't want to waive my right to be represented by counsel where the CU is concerned.

And yes, cross-collateralization is evil. Unless you're holding the car's title in your hand, a credit union can force you to either pay off a credit card with them despite a Chapter 7, or surrender the car. They dinged me for $4,200 of the $11,000 I owed on their credit card--about the same as it would cost me for a 722 redemption loan. I haven't decided yet what to do.

[jennagirl]

Our attny actually told us to call and check with NFCU. There was no problem with them reaffirming on both cars. They were fine about it. Our atty said all credit unions he has ever dealt with NEVER let you reaffirm, but I have heard that NFCU has let folks do it as long as the car payment is in good standing. Like I said, they let us reaffirm on both of our cars.

[SleeplessMI]

Thanks--I might be in a different situation, though. My attorney asked them to send us a reaff agreement and they sent it for the $3,800 I owed on the car plus another $4,200 out of the $11,000 I owe on the credit card. That $4,200 didn't come out of nowhere.

I have a feeling it's not going to fly, but it can't hurt to ask.

[jennagirl]

I would call them and ask. We didn't have any peace of mind until we called to ask. We owed a lot more than that though for our cars. We owed 15,000 on one and 6,000 on the other one.