Can a credit union hold a car title on a paid off secured loan because of a debt left from closing an account at the same credit union?

I paid off the loan about 4 years ago, and closed up all accounts at said credit union a little later. I recently realized I never received the title on my car. Today, my co-signer (my mom), went to get the title, and they won’t release it due to a debt. The debt is an unsecured debt related to possible overdrafts or something that happened after I paid off the loan for the vehicle.

Asked on August 14, 2012 under Bankruptcy Law, Illinois


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Whether or not a credit union that loaned on a car and received its registered title as security for the loan can legally hold back title after the car's loan has been paid off due to a debt owed from the closing of an account at the same credit untion depends upon what the loan agreement states. If it does not allow for the holding back of registered title then what the credit doing is improper.

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