Can credit union withhold the title of a paid off car because of a loan that is not current and has a cross-collateral agreement?
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Can credit union withhold the title of a paid off car because of a loan that is not current and has a cross-collateral agreement?
I have a personal and a car loan with the bank. I am current on my car loan, but late on my personal debt. My bank is threatening to reposes the car, even though I am current on it, until I am current on my loan. They also said they won’t give me the title until my personal loan is paid off. Is it legal?
Asked on May 31, 2012 under Bankruptcy Law, Massachusetts
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
One needs to read both agreement to see how they interact with eachother. I think that you may ahve used the equity in the car as collateral for the personal loan. And if they are so intertwined then maybe you are stuck. But I might contact the state department that monitors the credit union (like the state banking department) or the state attorney general's office. And bring the agreements to an attorney to read. Good luck.
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