Crump v. TitleMax (In Re Crump)
467 B.R. 532
Bankr. M.D. Ga.2010Background
- Debtor Crump pledged a 2001 Chevrolet Silverado to TitleMax in pawn transactions; ownership would automatically transfer to TitleMax if not redeemed within a 30-day grace period as provided by OCGA § 44-14-403.
- Debtor failed to cure the default by December 14, 2009; TitleMax became owner of the truck under Georgia pawnbroker statute.
- Crump filed Chapter 13 on December 18, 2009, listing TitleMax as a secured creditor with a claimed security interest in the truck and proposing plans to pay TitleMax via the plan.
- Chapter 13 plan was dismissed on June 2, 2010 for failure to make plan payments; TitleMax repossessed the truck on June 8, 2010.
- Crump filed a new Chapter 13 case on June 9, 2010 and moved for turnover under 11 U.S.C. § 542; TitleMax argued it owned the truck and was not required to return it.
- The court held Crump’s interest in the truck was forfeited prior to the first bankruptcy case; TitleMax remained the owner and turnover was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did TitleMax own the truck due to automatic forfeiture before Crump's first bankruptcy? | Crump contends waiver/return due under 542; asset not property of estate. | TitleMax asserts automatic forfeiture under OCGA 44-14-403; ownership vested. | TitleMax owned the truck; turnover denied. |
| What is the effect of dismissal of Crump's first Chapter 13 on TitleMax's rights to the truck? | TitleMax waived ownership by filing a claim and accepting adequate protection. | Dismissal restores rights to status quo ante; prior ownership stands. | Dismissal did not undo TitleMax's ownership; rights restored to pre-filing position, TitleMax owner. |
| Does Crump receive a new grace period after dismissal to redeem the truck? | New 30-day grace period after dismissal should allow redemption. | No basis for new grace period under state law or the Code. | No new grace period; ownership remained with TitleMax. |
| Is the truck turnoverable under 11 U.S.C. § 542 where it was pledged collateral and not property of the estate? | Property should be turned over to the estate despite prior forfeiture. | Pledged collateral not considered part of the estate post-forfeiture; not turnoverable. | Not turnoverable; TitleMax retains ownership. |
Key Cases Cited
- In re Keener, 268 B.R. 912 (Bankr.N.D.Tex.2001) (dismissal effects restore status quo ante; rights revert upon dismissal)
- Christie v. First State Bank of Stratford, B.A. (In re Keener), 268 B.R. 912 (Bankr.N.D.Tex.2001) (dismissal restores parties to positions before bankruptcy)
- In re Irons, 173 B.R. 910 (Bankr.E.D.Ark.1994) (dismissal effects and status quo ante guidance)
- In re Lawson, 156 B.R. 43 (Bankr.W.D.Pa.1993) (dismissal effects on debtor and creditor interests)
- Hilderbrand v. United States, 905 F.Supp. 774 (E.D.Cal.1995) (dismissal without discharge returns parties to prefiling status)