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Can a credit union hold a title for a car that is paid off because of an unpaid personal loan that has been charged off?

Lake Jackson, TX |

We paid off a car loan with the credit union a year ago and they keep telling us they will mail us the title but then we never receive it. The car was recently totaled in a wreck and we need the title to finish out the claim but the credit union keeps refusing to give it to us without a reason why. We took out a personal loan out with them a couple years after we got the car that went bad when we fell on hard times and its why I think they are refusing to give us the title but yet they aren't telling us if that's why. Instead they are just dragging us along and not telling us anything. Shouldn't they be telling us the reason why they are holding it instead of lying to us about mailing it? Is there anything we can do to receive the title and finish out the insurance claim?

The personal loan has also been charged off for at least a year now.

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Attorney answers 2


To answer your question would require more details regarding the loan terms on the car loan and the personal loan, and the terms on whatever security agreements you signed onto for each of the loans. Banks generally have the equitable right to "setoff" meaning the bank is allowed to take funds from one account a customer holds with them to pay a past due debt the same client has with that bank; however, that may not be applicable in your case. In any event, the bank should be giving you reasons why they are not releasing the title to you. It would be advisable to try and settle the issue yourself first, by writing a demand letter to the bank. Do not bring up or admit to the personal loan debt, just demand release of the car title and threaten lawsuit if they do not comply. If that doesn't work, it may be worth consulting an attorney. Based on what you've said, the banks actions may give rise to a Texas Deceptive Trade Practices Act (DTPA) claim, which allows you to recover attorney's fees and other additional damages under certain circumstances. Good luck!


It is hard to give you an informed answer based on these limited facts. You may have cross-collateralized the vehicle for the subsequent loan. You should hire an attorney to review the underlying documents and talk to the credit union on your behalf. My firm would be happy to assist you with this matter. You can contact me at

Your question has been answered as a courtesy. This is not paid legal advice. Nothing in this communication is intended to create an attorney-client relationship. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is it intended to reflect an intention to make an agreement by electronic means.

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