Can my credit union refuse my car payments?

UPDATED: Jun 27, 2012

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Can my credit union refuse my car payments?

I lost my job and my auto loan is behind 2 payments. I only have four payments remaining (including the two that are past due). I have collected enough money to bring the account current, however the credit union states they want the balance in full or will enforce repossession. I only owe $2,400 on a 4 year old car.

Asked on June 27, 2012 under General Practice, Texas


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Whether or not the credit union that hold the loand for the vehicle that you have can cintractually refuse your late payments depends upon what is stated in the loan documents you have with it. As such, I suggest that you carefully read the documentation in that such controls the obligations owed to you by the lender and vice versa.

Most likely the loan paper work contains an acceleration clause stating that if you fall behind on your loan payment the lender can demand that the whole balance remaining is due and payable.

I suggest that you pay what you can afford now and make up the difference owed later on concerning the car payments.

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