483 B.R. 244
Bankr. N.D. Ala.2012Background
- Creditor TitleMax objected to confirmation on grounds the plan extends the statutory redemption period for a 2005 Chevrolet Impala pawn.
- Debtor pledged the vehicle under a TitleMax pawn on April 6, 2012, with a May 6, 2012 maturity date and $2,866.74 to redeem.
- Debtor failed to redeem by maturity; Alabama law gave a 30-day post-maturity redemption window; petition filed May 31, 2012.
- Debtor alleged an oral extension to June 1, 2012; TitleMax repossessed the vehicle the same evening but later returned it postpetition.
- Court applied prior Alabama pawn cases to determine whether the debtor still had redemption rights and whether plan could modify them.
- Court concluded the redemption period extended only if still alive on petition date and found the pawn contract retained constructive possession by TitleMax.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether redemption rights are property of the estate and modifiable by a Chapter 13 plan. | TitleMax asserts plan cannot extend redemption once matured and is not subject to modification. | Debtor argues 11 U.S.C. § 1322(b)(2) allows modification if redemption rights exist prepetition. | Redemption rights cannot be modified if the contract has matured prepetition and redemption expired. |
| Whether the transaction is a pawn under Alabama law and thus subject to pawn-law treatment. | TitleMax contends a pawn agreement exists and constructive possession is retained by pawnbroker. | Debtor argues no pawn; contract terms deny constructive possession. | Court finds it is a pawn transaction; TitleMax retained constructive possession as defined by the contract. |
| Whether § 108 extends the redemption period after petition when redemption rights exist on filing. | § 108(b) extends redemption by 60 days after filing if not expired. | § 108 extension applies; other authorities may be distinguishable, but §108 applies here. | The extended time under § 108 expired; redemption not tendered, so period is expired. |
| Whether the debtor could redeem post-petition or cure through a Chapter 13 plan despite a pawn contract. | Plan could cure or modify redemption rights. | Eleventh Circuit requires affirmative steps to redeem; plan cannot extend pawn rights. | Chapter 13 cannot properly deal with pawned property to extend redemption; rights lapse. |
Key Cases Cited
- Geddes v. Mayhall Enterprises, LLC. (In re Jones), 304 B.R. 462 (Bankr.N.D.Ala.2003) (debtor cannot modify fully matured pawn rights prepetition)
- Lopez, 163 B.R. 189 (Bankr.D. Colo.1994) (pawn agreement can be modified if contract not matured at filing)
- Hall Motors, Inc. v. Lewis (In re Lewis), 137 F.3d 1280 (11th Cir.1998) (Eleventh Circuit requires affirmative steps to redeem)
- Floyd v. Title Exchange & Pawn of Anniston, 620 So.2d 576 (Ala.1993) (Pawn Shop Act and possession concepts)
- Moore v. Complete Cash Holdings (In re Moore), 448 B.R. 93 (Bankr.N.D.Ga.2011) (discusses §108 extension and redemption rights in context of pawn)
- Oglesby v. Title Max (In re Oglesby), 2001 WL 34047880 (Bankr.S.D.Ga.2001) (statutory redemption implications in pawn disputes)