Legal Question in Credit and Debt Law in Georgia
My auto insurance company has declared my vehicle a total loss after a tree fell upon it. They have requested the title to car in order to salvage it and render payment for the value of the car.
The car is paid for and has been for sometime. However, the lien holder (a credit union) will not release the title because I default on a Visa bill several years ago (over 3) during a period of unemployment.
I offered to negotiate a settlement on the amount owed ($7000) on the VISA bill but was told it had already been written off. Hence, they could not do a settlement.
They are still unwilling to release title to the vehicle. Without the title, I cannot receive the insurance payment. So I am currently stuck with no car.
What are my options in terms of getting the lien holder to release the title?
3 Answers from Attorneys
If there is a lien on the title it is not "paid for." To get the title, you need to pay the debt, whether it is the full amount or an agreed-upon settlement. This is assuming the credit union has a valid lien under the loan documents, but you have, or should have, that information. If you can't resolve it most likely the insurance company will eventually pay the lienholder what is owed.
When you borrow from a credit union they cross-collateralize the loan, so your car is not paid off. You owe $7000 on it. You will need to have the insurer give $7000 to the credit union and you get the rest.
Attorney Ashman is correct. Credit unions frequently cross-collateralize loans. What this means is that if you have a credit card and a car loan with them they can take your car if you default on the credit card.
Credit unions are also notoriously hard to settle debts with. Some want as little as 50% and others 100% of the debt. My suggestion is either have the insurer pay the funds to the credit union (you do not indicate what your car is worth - so I don't know if the VISA card will be paid off in full, if they will accept a settlement and take whatever the insurer is offering OR if you will still be left with a balance).
Otherwise, you may need a lawyer to get this resolved with the credit union so they will release the title and then you can deal with the insurer.
Credit unions are great ... except if you owe money to them and are in default.
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