Credit union issue....

[sassiebaz]

Hi all! I have a concern. We plan to file around March 1st. We are not quite 30 days late on one car payment. The car is not running and we want to include it in our BK. However, the loan is held through our credit union and although I made payment arrangements with them, I really don't want to pay another payment. But, Im afraid if I do not give them one more payment before we file, they'll seek a judgement against us. Is that usually how it works, or do we have a little time?

[optimistic1]

For a car payment they wont seek a judgement.

One of two things will happen.

They will either withdraw the funds without your consent from you checking/savings account whenever there is money in it.

Or they will repossess the vehicle.

What type of "payment arrangements" have you made with them?

Until you file the automatic stay would they not be able to repossess it, although I might be wrong about that, but that is my guess.

When it comes to auto loans, if you dont pay, they take the car, unless they cant find it, then I would say they might go the judgement route.

Let me ask you this

Why dont you just let them have it if it doesnt even run?

Although it might be more beneficial to keep it considering you would get to deduct more on the means test.

Let some others chime in, I might be wrong, or they might have some better ideas.

[magyar123]

Since you plan to file anyway and not reaffirm it don't bother paying them. Let them take the car
But first - ASAP - close any checking/savings accounts that you might have with them.

[Flamingo]

We were current on our auto loans until we retained our attorney who instructed us to stop paying CC's and car loans, but continue with mortgage payments. We filed two months after that. We were told we should be fine and we were; however, after 30 days, realize that you are in breach of contract as to your auto loan and they can repossess at any time. Review your terms/loan paperwork that you received when you obtained the car loan. Since you are going to go probably at least two payments late on the car, your chance of repossession is high. Be prepared - get all your paperwork out of the vehicle and any personal possessions. If you are really paranoiod about it, you can block in your vehicle with other cars or park it at another location (i.e., friend's house).

[sassiebaz]

Ok, Im not worried about them taking it. It's at our mechanic's shop. We have been given another vehicle so in that respect it's all good! I just know credit unions can operate a little differently and just wondered. I also have a visa card with them that I stopped paying over 3 months ago. Will they get a judgement for that? We still have a month and a half before we plan to file....

[optimistic1]

It depends on who actually extended the credit to you, was it the credit union via the credit card, or was it some other bank, like ELAN financial, a credit processor.

In my case, the bank issued us a credit card, and it had the credit union logo on it, but it was actually extended from another bank.

The best thing you can do is actually call your bank and ask them if there is a cross collateralization clause within the credit card contract.

I would guess that there isnt, or its actually issued by a different bank, because being three months behind, they would have already drained some money from your accounts. But dont quote me, they might just be waiting for some more time to pass before they go through with it. In that case, for the next month and a half, cash your checks somewhere else, and stop the direct deposit until you file, just to be on the safe side.

On the car, however, if you are not going to file for a month and a half, and the car is somewhere that Repo Joe, will basically never find it. I wouldnt pay anything on it anymore, and just file.

[sassiebaz]

Oh, yeah forgot to mention, we already closed our accounts with the CU. Other than the savings that they dont let you close. So, we are safe as far as that goes. Luckily, I found out from an employee about them draining our accounts before all this went down! Thanks for the heads up though! So, are you saying if the visa is from somewhere other than the CU that they can get a judgement? Soon? I don't plan on making any payments! We'll just pray for the best!

[MJJ3767]

Just my opinion but I think you have a little time. Keep in mind, once you are served with a lawsuit, you have 20 days to show up in court and respond before they can get a judgement on you. Also, I know you are in Arizona.......I was told by an Arizona attorney that most think a judgement is automatic after the court date passes. He told me it's not that quick...there is a process they have to follow. (at least you know you are safe for 20 days before they can get a judgement on you)

[optimistic1]

Any creditor could get a judgement, Im talking about something different. With bank issued credit cards, if they themselves extended the credit to you, and you still had direct deposit going in every two weeks. They have what is known as a cross collateralization clause within the contract, meaning they can take your money to pay the credit card debt, without a judgment.

So in your case, you closed the checking, and you no longer have money in it, well then, they cant take anything from you. But as time passes on, you will eventually receive a judgement.

But, if you are filing within a month and a half, you have no worries. If you are served papers within this time frame, you can answer the complaint, and that will buy you some time. Enough time to actually file the Chapter 13 and receive the automatic stay, thus barring them from doing anything.

If, you dont answer the complaint, it would still take them time to actually serve the garnishment to your employer, and even if they did garnish within the timeframe I noted above. The trustee would require them to pay all that money right back to him for your plan. It would be a big fat waste of time on their part.

Bottom line.


DONT WORRY, your filing soon, I am the one who needs to worry, Im not filing for 9 months, plenty of time for these leeches to suck some blood out of me.

[sassiebaz]

Ok, Ok, I get it now. Thank you all so much for your responses! I feel better now.