Can I sell something that is cross-collateralized?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can I sell something that is cross-collateralized?

If I have a 30k truck with a 23k loan on it that is cross-collateralized with another personal loan that I co-signed for that is in default. The credit union has threatened repossession even though the vehicle loan is, and always has been, current. I realize the cross-collateralization is strong so I need to sell the truck to rid myself of the payment so I can pay the co-signed loan. So can the credit union claim the 7k difference at the sale of truck or can I keep it to buy another truck with a 7k value?

Asked on June 20, 2012 under Bankruptcy Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

From what you have written, you can sell your truck that is cross collaterized IF the secured lender on it is paid its loan in full assuming that is an option. OR, you can sell your truck that has a lien recorded as to it to a third party buyer who is advised of this situation in writing and takes the vehicle by way of the purchase subject to the lien.

From what you have written, the credit union will want to be paid in full in the event you sell your vehicle to a third party based upoin my experience in such matters.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption