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Credit Union -- Collateral Protection Insurance

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    Credit Union -- Collateral Protection Insurance

    Credit Unions are weird... I don't understand.

    I'm a member at two different credit unions and I have a car loan with each. I told the local credit union I intend to surrender my vehicle. I told the other credit union 1,000+ miles away I wanted to re-affirm. Problem is, I had a credit card and a line of credit with them and they want me to reaffirm 2X the vehicles value.

    As a side note... I continue to have online access to my checking and savings accounts at both credit unions. I filed in mid-August and the accounts are still active. The only thing shut down is my credit card and line of credit.The accounts are virtually empty with less than $50 in each, but they haven't done anything with them. Why? Also, I haven't been making payments on either vehicle since before I filed but niether one has filed a motion to come and collect the collateral.


    Back to my original point... The far away credit union worries me the most. I have the vehicle here with a bad transmission and it's worth $5,000 (or less) and that's when it isn't broken. At first I was hoping they'd abandon it instead of trying to come and get it from over 1,000 miles away.

    How does Collaterial Protection Insurance work? I know they can't collect on the automobile debt because of the bankruptcy, but the original contract gives them permission to obtain CPI at my expense if I fail to provide proof of inusrance.

    I'm starting to worry about the vehicle being abandoned. I'm thinking I may be obligated to keep it insured forever! It seems to me that they can charge me for CPI if I fail to keep it insured. Since the CPI would be charged to me beyond the date I filed, I think I'd be on the hook for the charges.

    The LAST thing I want to do is haul a broken vehicle 1,000+ miles away to drop it off. On the other hand, I don't want to play the CPI game while the collateral sits here broken. Now I'm actually worried about the prospect of the vehicle being abandoned here!
    Discharged November 2008 100 days after filing no-asset Chapter 7. We intended to let a two-year-old vehicle go back to the bank and reaffirm an inexpensive ten-year-old SUV and our home mortgage. In the end we surrendered ALL of our vehicles and reaffirmed NOTHING. We'll "ride through" our mortgage after the court ruled it an undue hardship.

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