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cross collaterization
As I recall, most credit unions have a cross collaterization clause in their
membership agreement. So, if a debtor files a chapter 7, any balance the
credit union has in debtor's saving account is secured collateral against a
credit card debt. Which means the saving balance is applied to the credit
card, and only the remaining balance on the credit card is discharged. Or
if collateral exceeds the debt, the excess collateral goes to the bankruptcy
estate for administration or exemption.
Do I have that right? Can anyone point me to the authority that supports
this?
Larry Webb
California Board of Legal Specialization
Certified Specialist in Bankruptcy Law
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