Cosigner on car loan in bankruptcy

Please Help!!
My father co-signed on an auto loan with my husband at a credit union. My father has another car and 24,000 in credit debt with that credit union, and is now going bankrupt. My husband and I are preapproved to get a new loan with a different c.u to pay off the car loan with the original c.u. The origianl c.u says that they have a lein on the car and will not release it, they claim they will seize it as "cross collateral" even though all payments have been made on time for this vehicle.

1. Can they seize the car w/o a court order shown to us first??
2. Can they tie my husband to my fathers debt like that??
3. Why can't we pay off the car and be clear with that c.u, and not have my fathers debt affect my husbands credit??

Please help!! we only have 5 days till they say they are taking my car.

Sincerly -
Confused??

If the documents authorized them to take any asset as cross collateral it is legal...ask to see the documents first and have them tell you where this is allowed.

Often a co-signer is just guaranteeing and no lien or authorization was really ever granted.