When I first started practicing bankruptcy law over 20 years ago, title pawns were a fast growing, very lucrative business in Florida. Then in the year 2000, the Florida Legislature adopted a title loan statute to get the industry under some type of regulatory structure. Gone were the days of title loans being treated as pawn transactions and allowing nearly unlimited interest charges. Instead of interest rates of over 300% as had been routine before, the new statutory scheme required a 30 day default prior to repossession and capped title loan rates as follows:
537.011 Title loan charges.—
(1) A title loan lender may charge a maximum interest rate of 30 percent per annum computed on the first $2,000 of the principal amount, 24 percent per annum on that part of the principal amount exceeding $2,000 and not exceeding $3,000, and 18 percent per annum on that part of the principal amount exceeding $3,000.

The response from the industry was predictable – move to a better (i.e., less regulated) region and continue to charge the exceedingly high rates that used to be available in Florida. Kingsland, GA, less than an hour North of Jacksonville, became the new epicenter of title loan lending in NorthEast Florida.
Why is that relevant to a Florida bankruptcy filing? In our practice we see many individuals who have made the short drive to the North to take advantage of a title loan based on the Georgia title loan provisions. If that is the case, then your Chapter 13 case to save that car just became much more difficult. In December of 2017 the Eleventh Circuit Court of Appeals issued a ruling related to Georgia title loans (or “title pawns” as called in the case). The case can be found here:
The basic holding in the case is that if the Debtor has a title pawn under Georgia Law, then that title pawn must be paid off within 60 days of the filing of the case or the title to the vehicle is automatically transferred to the title lender. You read that right – automatically transferred. That means no further ability to cure the default through the plan, modify the loan terms or redeem the property through the Chapter 13.
Obviously, the best course of action would be to never enter into such a loan agreement. However, if you do find yourself facing a Georgia title loan repossession, then you should have counsel for your 13 who understands what you are facing and can properly advise you on what your rights are in Chapter 13.
Please feel free to contact our office with any bankruptcy related questions at 904-725-0822 or bkmickler@planlaw.com

Bryan K. Mickler