In Re Zaochney

2011 WL 6148727 (2011)

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Nature of the Case

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Facts

D signed a two-page credit line loan agreement with P on September 12, 2009. One paragraph, headed 'Cross-Collateralization,' states: Collateral pledged as security for other loans I have now or in the future with Credit Union will also be security for this agreement. This cross-collateral provision does not apply to my principal dwelling, or household goods pledged as security for other loans. D says she signed the agreement because P told her it was a one-time offer to obtain credit at a favorable rate. D alleges that there was no discussion of the cross-collateral provision. D purchased a car from Alaska Sales and Service. She financed the purchase through P. On the front page of the sale contract is a provision titled Security Interest: You are giving a security interest in the goods or Property Being Purchased as described above. As permitted by law the goods or Property Being Purchased secures other obligations now or hereafter owed by you to the Creditor and other Collateral held by the Creditor, including funds on deposit with the Creditor, secures this Contract (see reverse side under Security). The reverse side in fine print labeled 'Security' provides, in part: As provided by law, the Collateral for this contract secures other obligations you owe now or later to the Creditor, and other Collateral the Creditor presently holds or later obtains, also secures this contract. This cross-collateralization provision does not cover or extend to your principal dwelling, or household goods pledged as security for other loans. D filed chapter 7. The only creditor listed on Schedules D and F is P. D lists two secured debts owed to P: a mortgage on a residence for $220,000.00 and her obligation on the 2008 Chevrolet Impala of $12,000.00.10 D lists two unsecured debts owed to P: a deficiency balance of $4,836.22 on a repossessed 2005 Chevrolet Trailblazer and $5,000.00 for her credit line. D sought to reaffirm her car loan. P contends the vehicle secures the car and also $1,852.13 of the outstanding balance on the credit line. D contends the Impala is collateral only for the vehicle loan.