It is not disputed that the three transactions of Debtors with Cash America are governed by the Texas Pawnshop Act

It is not disputed that the three transactions of Debtors with Cash America are governed by the Texas Pawnshop Act

The bankruptcy court cited a regulation promulgated by the Consumer Credit Commissioner who was given authority by the Texas Legislature to “make regulations necessary for the enforcement of this [Texas Pawnbroker] Act and consistent with all its provisions

Appellant, Cash America, argues that when the goods were “pawned,” the Debtors gave their property in exchange for a contractual right to redeem the property by *421 paying a fixed amount within a specified time. It asserts that it is this contractual right, rather than the property itself, that became property of the estate, and that since Debtors never exercised that right, the title to the property passed to the pawnbroker at the end of the statutory sixty day redemption period, regardless of the filing of the bankruptcy petition. Debtors argue that since Cash America, in its pleadings and stipulation, has asserted the status as a secured claimant, it is estopped from https://www.installmentloansgroup.com/installment-loans-ok arguing that the pawned property was not part of the bankruptcy estate.

Tex.Rev. Civ. Stat. art. 5069-(a) (7) (Vernon Supp. 1996). It is also agreed that the initial maturity date, which occurred one month after each loan was made, had expired and that the sixty day grace period was in effect on the Petition Date. The effect of the grace period is disputed. The parties disagree as to the effect of the Texas Pawnshop Act’s following language: “[p]ledged goods not redeemed within sixty days following the originally fixed maturity date may thereafter, at the option of the pawnbroker, be forfeited and become property of the pawnbroker.” Tex.Rev.Civ. Stat. art. 5069-.

” Tex.Rev.Civ. Stat. art. 5069-(b) (Vernon 1987). The Consumer Credit Commissioner promulgated regulations dealing with the specific actions that must be taken by the pawnbroker when he exercises his option to take pledged goods as his property. The regulation goes on to state that if the notation has not been made, the loan is considered open even if the grace period has expired. Tex. Admin. Code Ann. § (E).

The bankruptcy court found that this regulation definitively establishes the time of ownership transfer. It further held that since the grace period for each transaction expired after the Petition Date , Cash America, having received notice of the bankruptcy filing, was foreclosed from taking the final action to gain ownership of the property because such action would be considered action to enforce a lien. 11 U.S.C. § 362(a) (5). The bankruptcy court distinguished the holdings in Dunlap v. Cash America Pawn, 158 B.R. 724 (M.D.Tenn.1993) and In re Jackson, 133 B.R. 541 (Bankr.W.D.Okla.1991). It applied the reasoning from United States v. Whiting Pools, Inc., 462 U.S. 198, 103 S. Ct. 2309, 76 L. Ed. 2d 515 (1983) as well as the regulations issued by the Consumer Credit Commissioner, in reaching its ruling that the Debtors had shown by clear and convincing evidence that the collateral was part of the bankruptcy estate.

The Court agrees. Under the agreed facts, it is clear that Debtors still had a legal or equitable interest in the pawned property because the statutory redemption period had not expired on the Petition Date. Property in which the Debtors had a legal or equitable interest on the Petition Date become part of the estate. 11 U.S.C. § 541(a) (1).

He must make a notation of the action and the date of the action on the fourth part of the pawn ticket or in the electronic records of the loan

ISSUE TWO: Did the bankruptcy court err, as a matter of law, in holding that a debtor’s contractual right to redeem pawned property from a Texas pawn shop can be modified in a Chapter 13 proceeding where the debtor fails to timely redeem the pawned property within sixty (60) days after the filing of a Chapter 13 petition?