Can a bank hold the title of my carafter I paid it off, if I owe on another account?

I had a car loan through an old credit union and paid the loan off years ago. The credit Union is holding the title because I defaulted on another personal loan with them. That personal loan is way past the statute of limitations for them to collect on it (over 7 years old since collections started). How long can they legally keep the title? I want to sell the car now but can’t without the title.

Asked on October 18, 2011 under Bankruptcy Law, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Obviously the bank that you deal with can hold the car registration (title) that you paid off because you allegedly defaulted on a personal loan with the bank since it is refusing to provide you with your registration of title to the vehicle that you own.

The issue is that the refusal to provide you with your car's registration is most likely improper and may subject the bank to a legal action for unfair business practices as well as interference with property rights that you have to the car. The defaulted loan is time barred under the statute of limitations from what you have written.

I would write the bank a letter demanding the car's registration by a set time period advising that if it is not provided, you will take legal action. Keep a copy of the letter for future need.

You should also consider consulting with an attorney experienced in contract law and financial institutions.

Good luck.

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