Personal Loan at credit union

[inpain66]

I have a question. My lawyer said I should stop paying unsecured bills for like 6 months before filing. One of my debts is a personal loan with my credit union. It is the same place as my car loan.

if I stop paying personal loan but keep paying my car loan will they take my car?

I cannot lose my car, especially prior to filing! I am even hoping to keep it in bankruptcy. Do you think this is possible?

[drowningNdebt]

I'm in the same situation as you. As long as you keep the car payment current they have no ability to come and get it. You can always reaffirm the loan if the credit union won't do a ride through. Reaffirming a loan is just an adjustment of terms and locking you to the debt. Therefor, you will not be able to walk away from it.

[justbroke]

I've heard that you should call your CU and ask if your car is cross-collaterized with anything else. If so, ask them if they can remove the cross-collaterization!

That makes it better.

[keepmine]

You do need to find out about the cross collateralization issue.
What it means is, if you refuse to reaffirm the personal loan and the auto loan they can snatch that car.

Reaffirming a loan is just an adjustment of terms and locking you to the debt. Therefor, you will not be able to walk away from it.

This is not correct. Reaffirmation means, you agree to the orginal terms-no adjustments unless you specifically negotiate a change. You are liable for any deficiency balance should you walk away in the future.

[Keebler]

You can assume that any credit union will cross-colateralize every debt you have with them. I stopped paying creditors except for the credit card, line of credit and vehicle loans at my credit union so I could keep my vehicle.

Several times bill collectors would call and be looking at my credit report and demand to know why I was current on ONE credit card and not paying them.

You should realize that I hadn't heard ANYTHING about cross-colateralization until this forumn taught me. Nothing I had ever read on any loan I ever had mentioned it.

In the end, I stopped paying my credit union loans a couple of months before I filed and tried to reaffirm only the vehicle loan and they wouldn't even consider it. The vehicle they repossessed just before I was discharged was going to fetch them far less at an auction than I was willing to reaffirm but they still wouldn't consider it. They actually lost MORE by refusing to reaffirm.

You might consider stop paying everything and driving the vehicle for as long as you can. If you file just before they get itchy to reposses you'll get another 60 to 90 days of use while the stay is in place. Use the money you save on payments to buy something cheap and you'll be debt free at discharge. Start saving for something nice after discharge and buy it when you can pay it all in cash and stay debt free.

[inpain66]

You can assume that any credit union will cross-colateralize every debt you have with them. I stopped paying creditors except for the credit card, line of credit and vehicle loans at my credit union so I could keep my vehicle.

Several times bill collectors would call and be looking at my credit report and demand to know why I was current on ONE credit card and not paying them.

You should realize that I hadn't heard ANYTHING about cross-colateralization until this forumn taught me. Nothing I had ever read on any loan I ever had mentioned it.

In the end, I stopped paying my credit union loans a couple of months before I filed and tried to reaffirm only the vehicle loan and they wouldn't even consider it. The vehicle they repossessed just before I was discharged was going to fetch them far less at an auction than I was willing to reaffirm but they still wouldn't consider it. They actually lost MORE by refusing to reaffirm.

You might consider stop paying everything and driving the vehicle for as long as you can. If you file just before they get itchy to reposses you'll get another 60 to 90 days of use while the stay is in place. Use the money you save on payments to buy something cheap and you'll be debt free at discharge. Start saving for something nice after discharge and buy it when you can pay it all in cash and stay debt free.

if I lose this car there is no way I can pay for another car!!!

So I should call the credit union and ask them to stop cross-colateralization?

wouldnt they find that to be suspicious?

[StartingOver08]

Yes, probably if you call the CU before you file and ask them to 'stop cross-collateralization' they will find that suspicious.

I also had a auto loan, credit card and a second mtg with the same CU.
I filed BK, and I have reaffirmed the auto loan without any cross-collateralization; however, the previous posters are correct. You have to negotiate the terms with the CU. I was able to negotiate all of the terms - payment amounts, length of remaining amortization, interest rate, removal of cross-collateralization etc. And still keep the car. For me it was worth while because only $8k is left on the car and I don't think I can qualify for a loaf of bread on credit right now! So buying a car on credit was not an option for me. Also, I am a real estate agent - got to have a car for my business. I don't have the cash either because I filed in FL and you don't have the exemptions here that you have in other places. BTW, tried to negotiate on another vehicle for a reaffirm and the bank was completely uncooperative. They really don't care if they have to pick up the vehicle or not. So your end result will be how the BK dept works with its debtors for that given lender. Each is different.

So when you analyze your situation, you have to look at what is possible and what is probable given your specific finances, your state's exemptions etc. It is good that you are here a little early so you can pre-plan the BK for the best possible outcome for you.

[inpain66]

Thanks!

So I am not going to know if I can keep the car til after I file? Is that correct?

[santadawg]

Also, I think if there cross-collateralized, once the car loan is paid off, they won't give you the title to the car untill you payoff the cc loan.

I called mine and they send I can keep making car payments and they will keep sending me cc statements. It makes you think, because my interest rate is at 6% with my cc, but I owe 5K. Both cars & cc is around 28k. I don;t think it's worth it if I'm looking for a fresh start.

Just my 2 cents

[drowningNdebt]

I'm confused. So say I have a personal loan, credit card and auto loan with my credit union. If I stop paying my credit card and personal loan they can still come get the car even though the payments are current on it?

[santadawg]

No, if you keep paying the car loan they won't come after the car. But when it's paid for they won't give you the title if the loans are cross-collateralized. All the loans become 1 loan.

[santadawg]

At least that's what I was told through my CU. Sometimes your better off dealing with them directly, My BK lawyer is no help.

[drowningNdebt]

oh i c. unless you file bk and eliminate all debts with credit union with hopes of a ride through or reaffirmation on the auto loan.

[keepmine]

Here's some caselaw on the issue.

http://www.bankersonline.com/lending/so_reaffirmation.html

[StartingOver08]

BTW, when I had the cross-collateralization removed from the auto loan at the CU, I also had the CU WRITE in the reaff that they would promptly send me the title when the auto loan was paid. The reaff also states the number of payments due and the amount so there is no confusion.