A bankruptcy judge in the Northern District of Georgia disagreed with the result in an opinion from October 2016, by a district judge in the Middle District of Georgia and held that a chapter 13 plan cannot stretch out the redemption period for a pawn loan.
In both cases, the debtor pawned a car. Extended by 60 days under Section 108(b), the period to redeem the car expired after bankruptcy. In Title Max v. Northington, 16-172 (M.D. Ga. Oct. 27, 2016), District Judge Clay D. Land of Georgia’s Middle District upheld the bankruptcy judge and ruled that the debtor could treat the pawn broker as a secured creditor and pay off the pawn loan under a chapter 13 plan, thus retaining the car.
In the Northern District case, Bankruptcy Judge W. Homer Drake held that state law governed. After the extended redemption period expired, he said the auto was no longer property of the estate and could not be redeemed by treating the pawn broker as a secured creditor under the chapter 13 plan.
In Judge Drake’s case, the debtor did not file a brief opposing the pawn broker, who sought and received a modification of the automatic stay to recover the vehicle. The pawn broker’s brief did not cite, distinguish, or discuss Title Max v. Northington, nor did Judge Drake’s opinion discuss that case.
To read ABI’s discussion of Title Max v. Northington, click here.
The opinion is First American Title Lending of Georgia LLC v. Holt (in re Holt), 16-12150 (Bankr. N.D.Ga. March 6, 2017).