People in Tennessee who have pawned some possessions prior to filing for Chapter 13 bankruptcy might be able to pay off those loans and get them back, but it depends upon the jurisdiction and when the items were pawned. In Georgia, a man pawned his vehicle and then filed for Chapter 13 bankruptcy within the 30-day grace period for redeeming the title. However, since the bankruptcy filing was not confirmed until after the grace period ended, Title Max, the company that had the vehicle, argued that it should not be considered part of the bankruptcy estate. Both the bankruptcy court and a district court disagreed.
Under a Chapter 13 bankruptcy, a person makes a payment plan to repay creditors within three to five years while keeping those assets. In this case, the court ruled that the man would have to make regular payments to Title Max or the company would be able to keep his vehicle.
However, he had not given up his ownership interest in the car, so Title Max could not seek relief from the automatic stay. The company was bound by the Chapter 13 plan.
People with steady incomes who are concerned about keeping their assets after filing bankruptcy might want to consider Chapter 13 bankruptcy. They could keep a home, a vehicle or other assets if the court approve the repayment plan. Anyone who is struggling with debt might want to discuss their options for debt relief with an attorney. If a person becomes ill, loses a job or gets a divorce, debt may build up rapidly and become overwhelming. Bankruptcy stops creditor harassment and can be a way to start fresh and begin repairing credit.