I have 4 loans through 1 bank and plan on bankruptcy, can they repossess my vehicle with them even if current on payments? 18 Answers as of August 13, 2013I have four loans, all with the same credit union. Two are credit cards, and two are vehicle loans. I plan on filing bankruptcy soon on both credit cards and one of the vehicles, but I want to keep one of the cars. The payments are low and affordable, and I'm completely current and caught up on it. Can they still repossess the car that I'm current on?
Hayward, Parker, O'Leary & Pinsky, Esqs. | Michael O'Leary
Credit unions loan documents typically contain "cross-collateralization" clauses, which essentially provide that the collateral for one loan serves as collateral for every other loan that you have with the credit union. If this is enforced by the credit union (and there is no reason to suspect that they won't), the vehicle that you are "current" on could be repo'd if both car loans are not paid.
Answer Applies to: New York
Law Office of Jeffrey Solomon | Jeffrey Solomon
Many credit unions have "cross-collateral" agreements. This means that all loans are secured by all other loans. So your credit card or signature loan might also be secured by the car. You should consult an attorney and discuss possible chapter 7 or chapter 13 in light of the possible cross-collateral agreement.
Answer Applies to: Florida
Michael B. McFarland, P.A. | Michael B. McFarland
It may depend upon whether the credit union is cross-collateralized on the vehicles. An experienced bankruptcy attorney should be able to tell from the paperwork on the loans whether he can reaffirm on just the one vehicle. He may also be able to restructure the debt through a chapter 13. Again, the best option is to get a consultation with an attorney before things get worse.
Answer Applies to: Idaho
Portland Bankruptcy Law Group | Christopher J. Kane
Credit Unions often have a "cross-collateralization" clause in their contracts. If this clause is in the contract for one of the car loans (it is probably in both car loan contracts), then the car that is collateral for that loan is also collateral for the credit cards and any other debts you owe the credit union. That means that you will not get the title to the car until all those debts are paid in full. And, if you default on any of those debts the credit union has the right to repossess the car. In some circumstances, if you have had the car loan for long enough you might be able to "cramdown" the credit union debts in a Chapter 13 bankruptcy, where you end up only having to pay the credit union the current market value of the vehicle.
Answer Applies to: Oregon
A Fresh Start | Dorothy G Bunce
When you have a car loan with a credit union, all your other loans are tied together under a policy called "cross collateralization." To keep the vehicle will require that you pay off all loans to that institution to obtain title to the vehicle. The credit union may not repo the vehicle, but do you really want to pay off a vehicle without being able to obtain the title?
Answer Applies to: Nevada
Danville Law Group | Scott Jordan
You will need to list all assets and debts. This is important! As long as you are current and continue making your payments for the vehicle, the bank will have no reason to repossess it. Make sure you state that you intend to retain the vehicle in your Statement of Intent.
Answer Applies to: California