Posted on: 14th Mar, 2012 03:14 am
I took out an auto loan from my credit union. I also had a cc from the same credit union. I had fallen behind this card payment due to reduction in my wages. However, though in this tough situation, I managed to pay off the auto loan. Now the credit union refuses to return the title to the auto because I am still delinquent on the card payments. Can they be forced to return the auto title?
You're facing the problem of cross-collateral. Most of the credit unions use this technique in order to recover their debts. There are high chances that this clause will be mentioned in your documents as well. So, you will have to take steps in order to pay off the cc payments in full. You can seek a payment plan from the credit union in this regard.
Hi Gallow!
Welcome to forums!
I agree with Niicss that this is a case of cross-collateral. If the clause of cross collateral is mentioned in your loan doc, then a bank/credit union has a legal right to seize any or all assets pledged by a borrower for different loans with them even if only one loan goes into default. However, you should check out the loan docs in order to find out whether or not such a clause is mentioned in the docs. If it's not mentioned in the docs, then they can't do the same.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
I agree with Niicss that this is a case of cross-collateral. If the clause of cross collateral is mentioned in your loan doc, then a bank/credit union has a legal right to seize any or all assets pledged by a borrower for different loans with them even if only one loan goes into default. However, you should check out the loan docs in order to find out whether or not such a clause is mentioned in the docs. If it's not mentioned in the docs, then they can't do the same.
Feel free to ask if you've further queries.
Sussane
Cross collateral is what you are facing..........until you pay off the card they still have interest in the title. Most if not all CU's have this in their terms when you open an account with them. :idea: