Aggressive Collections From Minneapolis and St Paul Area Credit Unions

In my practice some of the most aggressive collection activities comes from local credit unions. The credit unions are getting their clients to sign agreements that basically cross collateralize loans with bank accounts or other assets. In most cases my clients do not even know they have agreed to those terms when they are getting the loan. The other practice that credit unions employ is shutting down clients checking and savings accounts after they have filed for bankruptcy. This practice does not make sense unless they are attempting to punish people for filing for bankruptcy.
It is important for consumers to look over their loan documents carefully to make sure they are not cross collateralizing any of their assets in order to secure a loan with a credit union. I have even heard of some local credit unions taking back peoples cars if they do not sign reaffirmation agreements. In many cases this is doing the client a favor, since the car they are taking back is underwater. In these cases the credit union has decided to take back a car worth less than the loan, sell that car at auction and take a huge loss. The alternative is my client continues to pay on the car loan, and the credit union recovers the full value of the loan, over the course of the payments. In some cases the credit unions may have better rates than banks, but I have seen much more aggressive collections from these credit unions. Some of the credit unions seem to take any bankruptcy filing personally and attempt to punish their former clients. We generally advise our clients to avoid credit unions if they are filing for bankruptcy protection.