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Can bank hold title to car for a default on another loan?

Grovetown, GA |

We recently paid off our vehicle loan, which is titled between my husband "and" I. He defaulted on a loan with the same bank (my name is NOT on this loan) and the bank is now withholding the vehicle title due to the loan default, stating they have the right to repossess the vehicle to pay toward the defaulted loan. Can they legally do this?

Attorney Answers 2


  1. Yes, banks can "cross-collateralize" more than one loan with the same borrower(s), if the loan documents the borrower(s) signed agree that the bank can do this. You'll need to review the loan documents to see what you've agreed to.

    Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.


  2. Local credit unions rountinely have these cross collateralization clauses. Other banks often do not. you need to review the paperwork to determine whether it states that the collateral pledge as security for one loan also secures any other obligation to that lender.

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