Cross Collateral questions

[kari]

Good Morning,
We filed Chapter 7 about a week ago. We have two cars and a credit card through our credit union. We were only going to give up one of the cars, but our attorney explained that some credit unions have what's called cross callateral. This would mean that we could give up the one car and file on the card and keep the other car. He said the credit union may tack on what we owe after they auction our car and the credit card balance onto the one car loan that we keep. So, we've decided to give up both cars. How hard is it going to be for us to get a car loan ($4000 with $1000 down) after we are discharged? Second, before we had decided to give up either car, we had a minor accident in our driveway - I ran one car into the other while parked. We filed a claim with our insurance ($700 on one and $1300 on the other). We have not collected yet because we weren't sure where we were going to get fixed. The only options are a check in the body shops name or the credit unions. Should we cancel the claims since we're giving the cars back and keep our insurance record clean, or just have the checks issued to the credit union?
Thanks for any help.

[djt]

I am in the same boat as you are. I have 2 cars and a mortgage financed with my credit union. I want to keep paying the mortgage, which won't be a problem because there is no cross collateralization on it, but the cars do have it. I want to keep one and get rid of the other. I was trying to sell it prior to bankruptcy, but to no avail. I think I am going to continue to pay on it and see if I can sell it. My 341 is 10/31. With a credit card it's different I suppose, but I'm sure they will not want to lose on all three by having you surrender them all. I would offer to reaffirm one or both cars and discharge the CC. All they can say is no. Because if you surrender both cars too there is no way the will be able to sell them for what you owe on them.

I wish someone would share some of the experiences with credit unions.

Good luck to you.

[kari]

Thanks for your response. Good luck to you too. I'm not even sure we want to keep either car. Does anyone have a response to the questions regarding the insurance claim or purchase of a car right after?

Thanks for any help

Kari

[kari]

Can Someone please respond

Sorry, don't mean to be a nag, but does anyone have any answers or opinions for me?

[rrockinggramma]

Ok I had 2 car loans and a credit card and was stuck with the cross collateralization with the credit union. What we did is we filed a 722 Redemption and went through that company. Paid the FMV of the vehicles (refinanced it with 722) and discharged the rest in our chapter 7 (01) Now the laws regarding that are a little different because you have to have had your vehicle for a while to do it. But that might be an option. 722 HAS to go through your lawyer and the trustee but it will save your vehicles and also discharge your debt to the CU. Our credit union refused to service us the second after we filed so to the poster with the mortgage at your CU, good luck. You might want to consider refinancing it somewhere else.