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Pawned possessions and Chapter 13 bankruptcy

People who file for Chapter 13 bankruptcy may be able to include a pawned vehicle as part of their estate although this may vary based on jurisdiction. In the state directly to South Carolina's south, a man who filed for bankruptcy had pawned his 2006 Toyota Avalon. He had a 30-day grace period in which to get the car back. He did not do so , but he still legally possessed the vehicle when he filed.

Title Max, the company that he pawned the vehicle to, argued that the plan was confirmed after the expiration of the 30-day grace period. The bankruptcy court disagreed as did the Georgia district court that heard the case. According to the court, the debtor retained an ownership interest, and Title Max could not receive relief from the automatic stay.

In a Chapter 13 bankruptcy, peoplemay be able to keep their assets. However, they have to work out a plan to repay part or all of their debts over the next three to five years. A secured creditor's claim may be modified and the debtor might have to pay only slightly less than what the creditor claimed, but the terms of the Chapter 13 plan are also binding.

People who are struggling with debt might want to consider Chapter 13 bankruptcy. Filing for bankruptcy puts an immediate end to calls from creditors. With a Chapter 13 bankruptcy, people might be able to keep their home or other property while still looking ahead to a fresh financial start. Some might be concerned about the effect a bankruptcy will have on their credit, but attorneys will advise their clients that it can be rebuilt following a bankruptcy, and eventually, the filing no longer appears on a credit report.

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The Huggins Law Firm, PA

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