Can a credit union hold the title of your vehicle if the vehicle is paid off but your account is negative?

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Can a credit union hold the title of your vehicle if the vehicle is paid off but your account is negative?

I had a account and loan through a credit union. I’m trying to get the title to my vehicle, but they want me to pay my account to and will not give me my exact payoff on the vehicle. The account wasn’t collateral.

Asked on June 23, 2011 under Bankruptcy Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The answer, based on what you write would be no--unless there is some other agreement you have executed with them which authorizes this in some way; for example, if your account agreement states that if you are in arrears, the credit union has the right to not release any collateral or property used as security for any other loans with or through it. However, absent some authority in something you signed or agreed to, it would seem that once the vehicle loan is itself paid off, the credit union has no right to hold title to the vehicle; the fact that you owe them money for an unrelated reason would not give them that right. Check all your agreements and ask them to point to the agreement, term, etc. which they believe gives them the authority to do this.


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