Legal Question in Consumer Law in Pennsylvania
Is it legal to reposses a car for a loan at the same bank as the auto loan but not for the auto loan itself
Asked on 6/08/11, 8:42 pm
1 Answer from Attorneys
Kimberly Coleman
Coleman & Kempinski P.C.
It depends upon whether the loan documents with the bank contain a cross-collateralization clause. What this means is: if you have a loan with the bank and use your car or other property as collateral for the loan (thus making it a secured loan), the loan agreement may contain a clause providing that any other debts you owe to the bank (unsecured loan, credit card, etc.) are also secured by the same property. You probably want to look at the car loan documents to see if there is such a clause. Good luck!
Answered on 6/09/11, 9:17 am