4

If I borrow money from a credit union (and make monthly payments) and the credit union goes bankrupt, am I still required to pay the money back?

If the organization is bankrupt, to whom would I be making the payments?

12

Yes, you are.

When someone is bankrupt their assets are being sold to satisfy the creditors. Your note is an asset, and will be sold. You'll be making payments to the entity that buys it.

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2

You still owe the money because there is a high probability that some other organization bough the account and assets of the failed creditor. That means they will have bought your debt. I have to assume there is language in your note that explains that they might sell your debt.

But what should one do if they don't know who bought the entity? You can't pay a non-existent entity, but if you don't have an address, how can you pay the new owner of the debt?

First step, is to assume there will be a new owner. A government, a company, an individual; somebody will buy that debt. Read the news and see if you can't figure out what other entity owns your note. You might have to contact them to enquire about where to send payment. Keep records of any such contact.

If you put in an honest effort, but just cannot figure out who owns your note, I'd suggest continuing to make regular on-time payments. But put your payments into a new bank account that you open just for this purpose. So when the new owner of the debt does come calling, you'll have reasonable proof you were attempting to pay. You simply settle up from the special account. Any reasonable company will just take the money, and if anybody gets unreasonable and you have to appear in court, you have a paper trail indicating your attempts to honour the debt.

You'd have to consult a lawyer if nobody comes asking for the money. There are probably statutes of limitation, but I wouldn't count on that ever happening.

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