Expert: Terry Leeders - 2/3/2009

Question
I HAVE FINANCING THROUGH MY CREDIT UNION , WHICH INCLUDES MY MORTGAGE,AUTO LOAN,PLATINUM CREDIT CARD,LINE OF CREDIT.
WELL IAM CURRENT ON MY MORTGAGE AND AUTO LOAN.DELIQUENT ON THE OTHER TWO. WILL THE BANK TRY TO USE CROSS COLLATERALIZATON ? IAM WILLING TO LET THE CAR GO IF NECESSARY.

Answer
Yes, credit unions are notorious for cross collateralizing debt.  You can surrender any asset that is covered under that clause to discharge the total debt.  Also, you can strip off cross collateralized debt on a vehicle thru 722 redemption, you offer the lender the fair market value for the asset, and the bankruptcy court strips off all other liens.  There are funding companies for this as well, so speak to a local bankruptcy attorney to get you this info and advice.