Can a credit union refuse to release the title of a car reaffirmed AFTER it is paid off because you filed bankruptcy and were discharged for other loans with the credit union?

A discharge of a debt in bankruptcy does not mean the debt is paid.

Secured debts such as a vehicle do not get discharged in BK. The loan has to be reaffirmed, paid as agreed or settled according to the terms of the lender.

If none of the above apply, the credit union is still a lien holder on the title and the title will not be cleared until that is done.

If the loan was reaffirmed and paid according to the terms the credit union has to release the title within a reasonable amount of time. The time limit depends upon how long it takes the payoff transaction to be finalized, for example a check or money order clearing, and so forth.

Exception when lender may not release the title: Cross-collateralization!

This is a term used when the collateral for one loan is also used as collateral for another loan. If a person has borrowed from the same bank a home loan secured by the house, a car loan secured by the car, and so on, these assets can be used as cross-collaterals for all the loans. If the person pays off the car loan and wants to sell the car, the bank may veto the deal because the car is still used to secure the home loan and other loans. Technically, cross-collateralization expires when the borrower has no outstanding loans with the bank. In the context of bankruptcy, cross-collateralization also means the collateralization of general unsecured prepetition debt by collateral securing post-petition loans.

Another example of cross-collateralization is when an individual may have a checking account and a loan at the same bank. If the individual becomes past due on the loan, the financial institution may take money out of the bank account or freeze the account until the loan becomes current.