Hello, I'm trying to think of a way out of this situation. Situation: My friend has a $25K-balance on a car loan from a credit union. He also has a $25K-balance on credit card debts. He can't make any payments at all. I've read the car loan agreement, and it states (not a verbatim quote) the collateral (i.e. the car) is tied to all obligations owed to the bank. In fact, the credit union has applied all payments he's mailed in to the long-overdue credit card balance, even if the payments are marked for the car loan. Another friend is willing to take over the car by paying off the $25K on the car loan. But from the looks of it, there's really no way to weasel out of the credit card debt with a BK because they can still take the car. The only "problem" I see is the page with the statement about the collateral doesn't bear any initial or signature by the borrower (he did sign on the second page, at the end of the agreement). The credit union has been threatening repossession for a while already. Other than convincing the CU to work out a payment plan in addition to considering the car loan paid with the infusion of $25K, is there any other way out? T.I.A.
