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Pawned property and bankruptcy scenarios

Many Kentucky residents use pawn shops to obtain loans that are secured by personal property. In some cases, those personal items are held by the company making the loan, but in other cases, the property might remain in possession of a debtor with the title held by the pawn shop. This was the case in a Chapter 13 bankruptcy claim in Georgia.

A title loan company challenged the terms of the debtor's personal bankruptcy case, indicating that the individual had defaulted on his loan. The company insisted that the vehicle in question should have been forfeited. However, the bankruptcy case was filed while the debtor was still in possession of his vehicle after a grace period began. Because of this grace period, the bankruptcy court found that the debtor was not yet in default when the reorganization plan for his estate was submitted. He was deemed to have an ownership interest in the vehicle at that point, and the creditor's effort to obtain full title to the vehicle was denied by both the bankruptcy court and the district court.

Timing can be crucial in legal matters, especially if debts and reorganization plans are at issue. Attention to detail is also necessary for ensuring that a bankruptcy claim reflects the full slate of debts owed by an individual. Failing to include certain debts in the case could lead to those debts not being dismissed.

Bankruptcy is not always the best solution to one's financial problems, but a bankruptcy lawyer may offer helpful preliminary recommendations for ensuring that all viable remedies to debt problems are considered before filing. Additionally, a candidate for bankruptcy must first receive financial counseling, which could provide ideas for alternative methods of resolving debt. If these alternatives do not prove manageable, a bankruptcy lawyer can proceed to compile the necessary information and documents for a bankruptcy case.

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