question on auto loan with credit union

[StartingOver10]

Credit Unions cross collateralize their loans.

However, having said that, I owed a CU for a car loan + a credit card balance + a small second on my home when I filed Bk 7.

I reaffirmed the car loan only and discharged the cc debt and surrendered my home.

I had to add language to the reaffirmation agreement that the CU would send me the title to the vehicle once the balance of the vehicle loan was paid in full (I used the actual balance at the time of filing - which was small relative to the original loan amount). I also reduced the payment amount and stretched the payment out a few more months.  The reaffirmation is a pre-printed form with fill in type blanks. You have to add your own language if you are looking for terms other than what is in your original agreement. You definitely want to address the cross-collateralizing in the reaffirmation agreement, in writing. YMMV.  My attorney did not think they would accept it, but they did. Remember your attorney and the Bk court have to approve the reaffirmation agreement too. So have your plan before you speak to a Bk attorney.  

I paid the auto loan off in full and on time per the new agreement and received my title. There were no issues.  

BTW, I would do as one of the others suggested and research Bk attorney's. Some are excellent, some are awful. Distance is not a factor for Bk filings because everything but the initial interviews and the 341 are done electronically now. It pays to have a good attorney. You will suffer if you have a bad one. Check several. A large firm does not necessarily equal a good firm.  

[DaveInAZ]

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@StartingOver10 wrote:

Credit Unions cross collateralize their loans.

However, having said that, I owed a CU for a car loan + a credit card balance + a small second on my home when I filed Bk 7.

I reaffirmed the car loan only and discharged the cc debt and surrendered my home.

I had to add language to the reaffirmation agreement that the CU would send me the title to the vehicle once the balance of the vehicle loan was paid in full (I used the actual balance at the time of filing - which was small relative to the original loan amount). I also reduced the payment amount and stretched the payment out a few more months.  The reaffirmation is a pre-printed form with fill in type blanks. You have to add your own language if you are looking for terms other than what is in your original agreement. You definitely want to address the cross-collateralizing in the reaffirmation agreement, in writing. YMMV.  My attorney did not think they would accept it, but they did. Remember your attorney and the Bk court have to approve the reaffirmation agreement too. So have your plan before you speak to a Bk attorney.  

I paid the auto loan off in full and on time per the new agreement and received my title. There were no issues.  

BTW, I would do as one of the others suggested and research Bk attorney's. Some are excellent, some are awful. Distance is not a factor for Bk filings because everything but the initial interviews and the 341 are done electronically now. It pays to have a good attorney. You will suffer if you have a bad one. Check several. A large firm does not necessarily equal a good firm.  

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Great info, thanks for posting it! I'd never done business with a CU prior to filing my BK7 in 2010, so what I've learned about CUs & BK is from being here on MYFico. And what I've learned is they can be much trickier to deal with then banks.

Having said that, I now have accounts at 3 CUs - 1 for a great rate on a car loan, 1 for great rate & CLon a Visa CC, and one for a $200 new account bonus for moving my payroll direct deposit to them. Credit Unions are great to work with when your financial house is in order, but if I ever thought I was going have to consider BK again I'd refi that car loan to Cap One or similar, and close all the accounts.But fortunately that's something I don't have to worry about.

Now that I mention that: Cableguy - Do you think you could refi that car loan out of the credit union? Could make things a lot less complicated.

[Anonymous]

I probably good try and refi out into a different bank, maybe capital one. Wouldn't that look shady if I refinanced and then filled for chapter 7? Or how long would I have to wait to file?

[StartingOver10]

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@Anonymous wrote:
I probably good try andrefi out into a different bank, maybe capital one. Wouldn't that look shady if I refinanced and then filled for chapter 7? Or how long would I have to wait to file?

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I think the trustee would have a problem with you refinancing just before filing. Not sure what the actual legal implications are but the trustee will definitely want to see all your loan docs for the purchase and the refi anyway. This is a good attorney question.

I tried to google it for you to see if there were answers online, but did not find any details for you. I found one pertinent post here: http://www.bankruptcylawchicago.com/should-i-refinance-a-cross-collateralized-vehicle-before-filing-bankruptcy-to-get-a-better-deal/

[Anonymous]

Thanks for the help. So much to think over. Going to have alot of question for the attorney. Here's another scenario we have kicked around. My wife probably wont file with me. When we pulled our credit reports from annualcreditreport.com it turns out she only has roughly 1k of our medical debt plus a CC charged off for $600 in 2011. Would it be wise to go just go get a vehicle in her name and turn over the vehicle in my name during the BK? She has no credit at the moment so I imagine rates would be high.

Our house, auto, credit cards, un secured loans and medical collections our all in my name. Totally about 17 k not including auto and home. I got that short end of the stick I guess lol.

[StartingOver10]

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@Anonymous wrote:
Thanks for the help. So much to think over. Going to have alot of question for the attorney. Here's another scenario we have kicked around. My wife probably wont file with me. When we pulled our credit reports from annualcreditreport.com it turns out she only has roughly 1k of our medical debt plus a CC charged off for $600 in 2011. Would it be wise to go just go get a vehicle in her name and turn over the vehicle in my name during the BK? She has no credit at the moment so I imagine rates would be high.

Our house, auto, credit cards, un secured loans and medical collections our all in my name. Totally about 17 k not including auto and home. I got that short end of the stick I guess lol.

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This is pertinant info. $17k is not a lot of debt.  Have you tried other methods such as the snowball method or second income?  Are you in a community property state? 

I realize that debt is in the eyes of the beholder, or really, the one paying it. But really it is a function of your income. Have you considered going to some of the cc co's and speaking to the hardship department?  I mention this because they can workout a deal where there is little to no interest charged but you have to stop charging on the accounts. CU's are particularly good about this.  You may have other avenues than Bk for that amount of debt.

[DaveInAZ]

17k isn't that much debt, your attorney & court fees will be $1500-2k. Is you income adequate for the basics (home, car, utilties & food) & steady? Did your attorney talk to you about filing Ch13 BK instead? Ch7 is complete "liquidation" BK, if you have no assets the court can take then all debt is dishcarged. Ch13 is like a "re-organization" BK, where all parties agree to a repayment plan over a couple years according to your income, secured debt (home & car) is paid usually along the lines of current payments, while unsecured debt (CCs & medical) can be paid off for less than the full balance. Courts are usually fairly lenient in repayment of medical debt - medical debt is the most common reason for filing BK.

And did you get health insurance so youdon't get hit with high mdeical bills again? I'm in my 3rd year of health insurance from HealthCare.gov, it's afforadable and protects me from getting buried in debt should a major medical event occur. In my 2010 BK7 I had over $80k in CC debt alone, I'd been unemployed for over a year and used checks from one CC to make minimum payments on the others to stay afloat as long as I could.

[Anonymous]

Quick breakdown of our situation. I work full time and 2015 I made 61k before taxes. Wife got a job in September at the local school but only brings home about $1300 month and she pays for daycare. She wont get paid over summer months but also no daycare.

Take home income - $4000-$5000 month
mortgage - $950 and current
auto - $433 and current
Personal loan spring leaf financial - $133.missed last 2 payments and owe 3300
personal loan credit union - $129 and current
capital one - $75 owe 2300
Capital one - $25 owe 700
Barclays - $45 owe 1300
Fingerhut - $75 owe 1400
Creditone - $30 owe 700
Merrick bank - owe 1400 and missed last 2 payments
First premier - $45 owe 800
Medical combined - $3000 +/-
Car insurance $112

Plus utilities which vary monthly. Cellphones around $150. I work for a cable company so I get internet and tv for free. Im at work right now so I dont have exact figures. There are a few other knick knacks in collection (orkin pest bill, utility bill from years ago, etc) totalling around 1k

Anyhow my pay dropped substaintly at the beginning of last year. I was averaging about 15 hours of OT a week now im lucky to get 1 hour a week. Hired more employees so my stand by pay also dropped. With three young kids we are barely staying afloat due to our screw ups financially. We have good stable jobs, insurance now and I have a 401k (measly at the moment) both personal loans were taken out to pay medical debt because we thought we were doing the right thing.

I get discounted legal services through my work and bankruptcy is covered as long as i use an in-network attorney.

Sorry for the long winded post.

[StartingOver10]

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@Anonymous wrote:
Quick breakdown of our situation. I work full time and 2015 I made 61k before taxes. Wife got a job in September at the local school but only brings home about $1300 month and she pays for daycare. She wont get paid over summer months but also no daycare.

Take home income - $4000-$5000 month
mortgage - $950 and current
auto - $433 and current
Personal loan spring leaf financial - $133.missed last 2 payments and owe 3300
personal loan credit union - $129 and current
capital one - $75 owe 2300
Capital one - $25 owe 700
Barclays - $45 owe 1300
Fingerhut - $75 owe 1400
Creditone - $30 owe 700
Merrick bank - owe 1400 and missed last 2 payments
First premier - $45 owe 800
Medical combined - $3000 +/-
Car insurance $112

Plus utilities which vary monthly. Cellphones around $150. I work for a cable company so I get internet and tv for free. Im at work right now so I dont have exact figures. There are a few other knick knacks in collection (orkin pest bill, utility bill from years ago, etc) totalling around 1k

Anyhow my pay dropped substaintly at the beginning of last year. I was averaging about 15 hours of OT a week now im lucky to get 1 hour a week. Hired more employees so my stand by pay also dropped. With three young kids we are barely staying afloat due to our screw ups financially. We have good stable jobs, insurance now and I have a 401k (measly at the moment) both personal loans were taken out to pay medical debt because we thought we were doing the right thing.

I get discounted legal services through my work and bankruptcy is covered as long as i use an in-network attorney.

Sorry for the long winded post.

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How much do you pay monthly for the car and what is its value?  How much do you owe on it?

Same for the house - how much do you pay monthly, what is its value? What do you owe on it?

In which state are you located?

[Anonymous]

I live in Montana. House is probably around 160-165k. I owe 148k with a VA loan at 3.725 interest. Auto is blue book around 20-21k and I owe 18.1k with an 8% interest rate. I pay $433 for it. I last bluebooked it may of last year. Its an 08 sorry refinancing might be hard.