CU Auto Loan; CU Visa & CU Sig Loan - Cross Collateralization?

[doni49]

I have a car loan, Visa and SigLoan with the same CU.

I'm current on the car loan but stopped making pmts on the Visa and SigLoan in July.

Should I be concerned about an impending repo even though the car loan is current?

I'm hoping to file my Ch7 after I start my new job (hopefully within the next few weeks). I hope to do a 722 on the car loan--but I need to get a loan to do that. Of course, the 722 lender insists that I have full-time employment when I apply.

TIA!

[doni49]

Anyone out there have any thoughts on this?

TIA!

[ccsjoe]

I'm trying to find legal information regarding the 722 redemption loan programs, however am coming up blank other than links to the actual providers. I know US Bank is one of them, so they should be legit. Just wondering what the basis is behind them, how they work and any success or failure stories. If I come across the info, I'll give you my opinions.

Regarding the cross-collateralization, CU's are their own animal and there is usually no predicting how they will react. They may very well repo the car if there is a cross-collateralization clause especially if you have equity in the car.

[doni49]

I'm trying to find legal information regarding the 722 redemption loan programs, however am coming up blank other than links to the actual providers. I know US Bank is one of them, so they should be legit. Just wondering what the basis is behind them, how they work and any success or failure stories.

http://www.nolo.com/dictionary/redemption-term.html

http://www.legalhelpers.com/bankruptcy-articles/722redemption-articles.html

I already knew about redemption--I just mentioned it so that anyone reading this would understand why I've delayed filing. I need to have FT employment to get the redemption loan and I really need/want to keep this vehicle. I originally bought it new and have taken excellent care of it. Who knows what I'd get if I were to buy a used car to replace it.

Regarding the cross-collateralization, CU's are their own animal and there is usually no predicting how they will react. They may very well repo the car if there is a cross-collateralization clause especially if you have equity in the car.

Thanks. That's what I was afraid of. But since there is NO equity, maybe (hopefully) they won't repo as long as the car loan is current.

[ccsjoe]

I actually am running the 722 redemption option by my attorney as we speak, it might be beneficial to me. He mentioned he had not yet done one of those and will look into it and advise me as it pertains to our situation.

Good luck with the CU, I hope it woks out for you.

[ccsjoe]

Don, just to circle back with you. I emailed my attorney and he has heard of these but has never done one. We're going to actually call them and see how this really works out.

[ccsjoe]

And of course as I finished writing to you, my attorney came back with the following from one of his associates:

".....the interest rates are outrageous. However, that's not to say it may not make sense in your case, but, I am highly skeptical after considering them in a previous case. I think they definitely fall in the category of predatory lending..."

Just the feedback I got. I am still waiting for them to contact me tomorrow to see what the real deal is.

[doni49]

Yeah. I know the rates are high. I was told to expect in the 20% area. But if I can knock a few thousand off the balance owed, I hope to save more than the extra interest will cost me. KBB says my car is worth about 16k. The car loan is 22k, the visa is 8k and the SigLoan is 2k. So that should cut my balance due by 16k.

Plus I've already spoken with a loan officer at the local CU (in Missouri--the old one was in PA) and they've said that if I can show 3-4 positive trade lines 12 months after the BK, they'd most likely do a refi loan around 10%. So that should save even more.

And NO I won't be creating loans that will create a cross-collateral situation anymore. Learned that lesson!

[ccsjoe]

Hopefully it works out for you. My current loan value deficit is approx 7K and my soon to be reaffirmed loan is at 5.9%. Ford will continue reporting the loan correctly to the bureaus once we get discharged, so there's the credit history piece. The jump in interest would not, in my opinion, make up for the drop in the loan value. It certainly would make our monthly payments only barely more affordable; so for my case not worth it.

Good luck.