anicholson75 Posted March 19, 2007 Report Share Posted March 19, 2007 We belonged (accts are now closed though) to the Credit Union of Texas, and had an auto loan, checking/savings acct, and a credit card through them. We paid off the auto loan last month, checking/savings accts closed, but still have a $7K balance on the credit card, which has been charged off, and I'm sure is going to a CA. Here is my dilemma: We need to sell the truck to purchase my dad's jeep (DH just got his real estate license so we need a more presentable vehile for him to take buyers out in). I called the credit union today and asked where the title is (I thought when I paid it off they would just mail it to us) and they said that they cannot release it because of the credit card debt (although they charged off on it.) Is this right? The credit card was taken out WAY before the auto loan, and the credit card is unsecured, and the truck was not collateral for it. They say it's in their "Member Agreement" which I asked them to mail me a copy of today. Advice on this? We will be talking to a BK attorney soon, but I would like to get this resolved asap. Thanks again. Link to comment Share on other sites More sharing options...
ocn2000 Posted March 19, 2007 Report Share Posted March 19, 2007 That sounds wrong. Definitely read over the member agreement. It may not be legal, but they may be banking on you not knowing that and not doing anything about it. Personally, I would go ahead and file a lawsuit. I am very impatient and refuse to deal with a bunch of mororns. the suit has to be answered. I would would rather talk to one person who can fix the problem right then, whether it is their lawyer or someoen with authority at the company. Even if by some reason they are right, you will get all that info and can figure out what to do from there. Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 19, 2007 Report Share Posted March 19, 2007 Credit unions can cross collateralize. The NCUA allows it. Link to comment Share on other sites More sharing options...
ocn2000 Posted March 19, 2007 Report Share Posted March 19, 2007 That will make me think twice about using a credit union. Thanks. Link to comment Share on other sites More sharing options...
anicholson75 Posted March 19, 2007 Author Report Share Posted March 19, 2007 Oh, and once we informed them that we are most likely filing BK, they said once we filed and they are notified, that they will then release the title. What's the deal? If we've met our obligation of paying the loan, what could they legally do with just the title? They couldn't repo the truck on a loan that has been paid, to put toward the CC debt? Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 20, 2007 Report Share Posted March 20, 2007 No they cannot. But the difference is secured vs unsecured debt.The CC is unsecured. There is no title or claim to any asset behind it. The truck is secured as there is an asset that can be repossessed if needed. You could demand the title from them and see what happens. Sometimes they may release it. Link to comment Share on other sites More sharing options...
anicholson75 Posted March 21, 2007 Author Report Share Posted March 21, 2007 How is the best way to go about "demanding" the title? I'm willing to try, but I just don't know what kind of leverage I have, really. Suggestions? I've looked and looked on the FCUA website in all of their legalese and can't find anything in relation to what I'm dealing with. Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 21, 2007 Report Share Posted March 21, 2007 Go see an attorney and pay them $75 to write a demand letter. Demand title since the truck loan has been paid in full (there may be a violation of the VC if they don't deliver title in a reasonable time-- which is why you need an attorney).Again the CU is attempting to cross collateralize their CC loan. By holding the car title, they are attempting to force you to continue paying on the CC. Again, get the attorney to write a demand letter. One quick question- is this a state or federal chartered CU? If you don't know, PM the name of the CU and I'll find out. Link to comment Share on other sites More sharing options...
anicholson75 Posted March 21, 2007 Author Report Share Posted March 21, 2007 I finally found the timeframe in which the lienholder is supposed to release the title to the owner in Texas.OUTSTANDING BALANCE INFORMATION; PAYMENT IN FULL. (a) The holder of a retail installment contract who gives the retail buyer or the buyer's designee outstanding balance information relating to the contract is bound by that information and shall honor that information for a reasonable time. ( If the retail buyer or the buyer's designee tenders to the holder as payment in full an amount derived from that outstanding balance information, the holder shall: (1) accept the amount as payment in full; and (2) release the holder's lien against the motor vehicle within a reasonable time not later than the 10th day after the date on which the amount is tendered.But nothing in relation to holding a paid title against CC debt. We can't meet with an attorney until next week though. Any chance that I can tell them they are in violation of this code and see what happens? I don't want to look like an idiot if they really can hold it against this according to the credit union "rules". Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 22, 2007 Report Share Posted March 22, 2007 I finally found the timeframe in which the lienholder is supposed to release the title to the owner in Texas.But nothing in relation to holding a paid title against CC debt. We can't meet with an attorney until next week though. Any chance that I can tell them they are in violation of this code and see what happens? I don't want to look like an idiot if they really can hold it against this according to the credit union "rules".I would fax them a letter, with this exact section of law and tell them that if they DO NOT release title that you will file compliants with the TX Dept. of Credit Unions & the NCUA as well as seek legal action on your own. Hopefully, that will get the title released. Send the letter to the CEO himself. Link to comment Share on other sites More sharing options...
anicholson75 Posted March 22, 2007 Author Report Share Posted March 22, 2007 Ok, before I fax the letter, this is from the truck's loan agreement:Security Agreement"....Except as may be prohibited by applicable law and subject to the provisions of other loan agreements I have with you, property given as security for this loan also will secure any other loans I have with the credit union now or in the future and any other amounts I owe the credit union now or in the future."I guess this would include a credit card balance, right? Do you think that this applies to a paid-off auto loan, or only if I still owe them a balance on the auto loan and defaulted? I'm so worried that they are in the right. Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 22, 2007 Report Share Posted March 22, 2007 I would just demand title.It is an attempt to cross collateralize. The TX credit union law is vague in this area (I read it this morning). Now if there was no other loan, then by law they would have to release title. The auto loan is paid off. They cannot use a car loan today to secure a CC loan made next year. Now in your situation, it comes down to secured credit vs unsecured credit. You need to assert that title needs to be released. There may be a UCC violation in terms of releasing collateral (that's why the attorney needs to write the letter). Link to comment Share on other sites More sharing options...
anicholson75 Posted March 22, 2007 Author Report Share Posted March 22, 2007 Sounds good. Thanks again for ALL of your help and I will keep you posted. I've moved my attorney meeting up to tomorrow. Link to comment Share on other sites More sharing options...
LadynRed Posted March 23, 2007 Report Share Posted March 23, 2007 Chances are pretty good that when you took out the loan for the truck, or even before when you got the credit card, that the cross-collateralization clause was in the agreement that you signed for the loan. They do this ALL the time. However, to be enforceable they must include VERY SPECIFIC language and it must be INITIALED BY YOU agreeing to it. If the required language and your intialing is NOT there, they cannot enforce the cross-collateraliztion.If you have a copy of your original loan papers, get them out and go over the text. If you don't have a copy, ask the CU for a copy of them. Link to comment Share on other sites More sharing options...
anicholson75 Posted March 23, 2007 Author Report Share Posted March 23, 2007 Wow, I'm glad to know that! That certainly gives me a little more hope! The language that I posted is verbatim from the contract, but I only have a copy, not the original. I'll check with the CU for that. Thanks! Link to comment Share on other sites More sharing options...
anicholson75 Posted March 27, 2007 Author Report Share Posted March 27, 2007 Well here's an update:We met with our attorney on Friday and he seems to think that the CU may have got us on this one. We're just going to file BK 13 and hope that the title gets released that way, although I have no idea WHEN and how soon that will be. He didn't seem to think that the legalese they used was too generic, and the mention of the agreement being initialed or not was important. He did find it odd that the CU has charged off the credit card, but yet still holding the title against a charged off acct? He told us it *may* be a possibility that when we file BK, that they may try to take the truck as payment for the CC acct? But aren't vehicles protected in BK? I guess I"m still confused. I thought of all this after our meeting with the lawyer, as I was just a nervous mess during the whole meeting anyway. As for faxing a demand letter, the lawyer didn't seem too gung-ho for that idea. Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 28, 2007 Report Share Posted March 28, 2007 I think your lawyer may be getting his wires crossed...TX has some pretty generous laws when it comes to exempt property in BK. So even if the CU demanded the truck, the court may not allow it. As for vehicles, if there is no outstanding loan against it, then the court may not allow it (depends on a circumstances). I'd ask another attorney. It never hurts to get another opinion. Link to comment Share on other sites More sharing options...
LadynRed Posted March 28, 2007 Report Share Posted March 28, 2007 TX law allows you to exempt 1 vehicle per licensed driver - so yes, the truck is probably well protected.I believe I have a copy of the document regarding the required cross-collateralization verbiage. I'll look it up tonight.*** Found the link instead: http://www.cunamutual.com/cmg/freeFormDetail/0,1248,6684,00.html Link to comment Share on other sites More sharing options...
unusualsuspect Posted March 28, 2007 Report Share Posted March 28, 2007 Just another thing to consider...Try a BK7. Wipe the CU out completely. Since the car is exempt under TX law it's worth a shot. Link to comment Share on other sites More sharing options...
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