Title Max v. Northington (In re Northington
Split decision allows a lender to take property out of an estate automatically.
- Rochelle Quick Take
View Rochelle Summary- Case Type:
- Consumer
- Case Status:
- Reversed and Remanded
- Citation:
- 16-17468 (11th Circuit, Dec 11,2017) Published
- Tag(s):
- Ruling:
- The narrow holding of this split decision is that Georgia's pawn statute cuts off the rights of a Chapter 13 debtor in pawned property if the debtor doesn't redeem the property within the time limit established by the Georgia statute, as such deadline is extended by 11 U.S.C. § 108(a), The broad holding is that state laws that terminate rights to redemption and provide for transfer of title upon expiration of the redemption period may terminate a debtor's rights under 11 U.S.C. § 1322(b)(2) (and probably the rights of trustees and debtors in possession under other statutes.)
- Procedural context:
- Following the debtor's failure to redeem his automobile during the state-law redemption period, the title loan company (TitleMax) filed a motion for relief from the automatic stay to recover the vehicle, The debtor filed a Chapter 13 plan that provided for treatment of TitleMax. TitleMax did not object to confirmation of the debtor's Chapter 13 plan. Before addressing the merits of TitleMax's § 362 motion, the bankruptcy court confirmed the debtor's Chapter 13 plan. The bankruptcy court subsequently denied TitleMax's stay-relief motion. TitleMax appealed, and the district court affirmed the bankruptcy court on the merits. TitleMax again appealed.
- Facts:
- Before Wilber filed his Chapter 13 petition, he entered into a "title loan" transaction [the opinion calls it a "pawn transaction"] with TitleMax, in which he delivered title to his 2006 Dodge Charger to TitleMax in exchange for a $4,400 cash advance. Wilber kept possession of his car. Wilber failed to timely pay off the loan, and filed his Chapter 13 petition and plan during the 30-day redemption period under Ga. Code Ann. § 44-14-403(b)(1). Wilber's Chapter 13 plan treated TitleMax as a secured creditor. Wilber failed to redeem the title 11 during the redemption period, as extended by 11 U.S.C. § 108(b); and TitleMax did not object to confirmation of Wilber's Chapter 13 plan. The plan was confirmed after the expiration of the extended redemption period. The bankruptcy court then denied TitleMax's motion for relief from the automatic stay to obtain possession of the 2006 Dodge Charger.
- Judge(s):
- WILSON, NEWSOM and MORENO (S.D. Fla., sitting by designation)
