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Credit union cross-collateralization lien
Mark:
Having represented a small credit union for many years as well as filing many debtor cases with cross-collateralization liens, I can say that almost no credit union in California will take the affirmative step of repossessing a vehicle based on a cross-collateralization lien securing a discharged unsecured debt. The general practice is to seek payment of the unsecured debt in exchange for release of the "pink slip" after the automobile loan is paid off; and this amount is usually negotiable.
Incidentally, there have been a few recent decisions in the Ninth Circuit affirming the enforceability of the standard credit union cross-collateralization lien. See In re Dumlao, 2011 WL 4501402 (9th Cir. BAP 2011) and In re Zaochney, 2011 WL 6148727 (Bkrtcy. D. Alaska 2011)
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
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