Ohio residents may be interested in a ruling holding that a vehicle involved in a title pawn is still part of the debtor’s Chapter 13 bankruptcy estate. This was the decision made by the U.S. District Court for the Middle District of Georgia. However, the lender is still entitled to be paid according to the terms of the loan or entitled to take the title to the car if payments are not made.

Title Max, the car title lender in this case, argued that the car should not be part of the estate. This was because the man had failed to redeem his car within a 30-day grace period to do so. However, the man filed for bankruptcy before the grace period expired and was still in possession of the vehicle. According to the court’s reasoning, the debtor had not relinquished his interest in the car.

Therefore, it was still part of the bankruptcy estate, and Chapter 13 law says that the rights of secured creditors may be modified. The debtor still owes Title Max almost all of the money it sought under its proof of claim while Title Max is bound by the terms of the Chapter 13 repayment plan. It should be noted that the ruling might not be the same in all jurisdictions.

Filing for Chapter 13 bankruptcy may provide individuals with a fresh financial start. Both secured and unsecured debts may be reorganized and paid off over a three- or five-year period. It may also give debtors time to negotiate new loan terms to prevent a repossession or foreclosure from occurring. An attorney can help a debtor learn more about the benefits of bankruptcy including an automatic stay from creditor collection efforts.