Can a credit union freeze my account from debt my husband had with them 10 years ago?

Asked over 3 years ago - Twin Falls, ID

My husband bought a truck and got a loan through a credit union, then he lost his job for a plant the the credit union was named after. My husband was not able to make the payments after he lost his job. The credit union actually sent him the title to the truck in the mail and this made him think he didn't owe the money anymore. Now 10 years later, I opened a savings account in both our names and bought two CD's in my name only. I applied for a loan through them and didn't want to put my husband on the loan, this sent a flag to them now they have frozen both cd accounts and our savings. They are asking for the amount they froze in payment even though that wasn't the amount owed, they are adding a bunch of money for interest and fees. Can they do this?

Additional information

I want to add the credit union changed their name from what it was when my husband has his loan from them.

Attorney answers (2)

  1. Charles Ross Smith III

    Contributor Level 16

    Answered . When you and your husband opened the savings account and CDs you signed an agreement with the credit union. In the fine print you both gave a "right of offset" to the credit union. That is why your account was frozen. This is a common term in credit union accounts.

    It may be that the statute of limitations has run in Idaho on the original loan. An Idaho attorney can advise you on that. It may also be that the credit can not produce the paperwork to back up their allegation that your husband owes this money. Ask them to produce the loan documents or at least copies of them. If they have no evidence, then they must release the money.

    The credit union's name change is not relevant. It sounds like there is some serious money at stake. It would be fairly cheap to hire an attorney to challenge the freeze and demand that they produce evidence of the debt or release the money. Good Luck.

    Thanks for reading me. I hope that my answer was helpful and answered your question. If you found my answer to be useful, please click the ‘thumbs-up’ tab below.

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

  2. Dorothy G Bunce

    Pro

    Contributor Level 20

    Answered . Credit unions do not rely on credit history as much as banks do & the reason they do this is because when any account is open, they link any debt to your deposit accounts in a process called "cross collateralization."

    This means that you have put up your checking & savings account as collateral for any loan you have with them, now or in the distant past.

    Sorry, I believe what they have done is consistent with the laws pertaining to credit unions.

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