Two vehicles same lender

I filed for bankruptcy just over a year ago in the state of New Mexico. I have a vehicle filed under the bankruptcy but I have made payments on-time and still use the vehicle currently. I recently purchased a new vehicle and the dealership financed the loan through the same bank (credit union) as my first vehicle. If I surrender my first vehicle, what are the bank's rights? Can the bank drop their financing on the new car? Can they raise the interest rate? What are my rights?

Reply from

It's a really good question, but we are not sure of the answer. Credit union auto loans typically contain cross collateralization clauses that give the credit union the right to take payments for loans on which you default from your shares. But we aren't sure what that means for your other car loan. There's probably no equity there, and it wouldn't make sense for them to make that loan less affordable. Plus the fact that you included the first vehicle in your bankruptcy may limit their rights.

We suggest you contact your bankruptcy attorney and ask him or her this question. Sorry we can't be of more help here!

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