2020 Georgia Code
Title 44 - Property
Chapter 14 - Mortgages, Conveyances to Secure Debt, and Liens
Article 8 - Liens
Part 5 - Pawnbrokers, Factors, Bailees, Acceptors, and Depositories
§ 44-14-403. Lien of Pawnbroker; Action for Interference; Grace Period on Pawn Transactions; Extension or Continuation of Maturity Date; Redemption of Goods After Maturity Date

1. A pawnbroker shall have a lien on the pledged goods pawned for the money advanced, interest, and pawnshop charge owed but not for other debts due to him. He may retain possession of the pledged goods until his lien is satisfied and may have a right of action against anyone interfering therewith.
2. 1. There shall be a grace period on all pawn transactions.On pawn transactions involving motor vehicles or motor vehicle certificates of title, the grace period shall be 30 calendar days; on all other pawn transactions the grace period shall be ten calendar days.In the event that the last day of the grace period falls on a day in which the pawnbroker is not open for business, the grace period shall be extended through the first day following upon which the pawnbroker is open for business.The pawnbroker shall not sell the pledged goods during the grace period.
   2. By agreement of the parties, the maturity date of the pawn transaction may be extended or continued for 30 day periods, provided that the interest rates and charges as specified in Code Section 44-12-131 are not exceeded.The grace period shall begin running on the first day following the maturity date of the pawn transaction or on the first day following the expiration of any extension or continuation of the pawn transaction, whichever occurs later.All extensions or continuations of the pawn transaction shall be evidenced in writing.
   3. Pledged goods may be redeemed by the pledgor or seller within the grace period by the payment of any unpaid accrued fees and charges, the repayment of the principal, and the payment of an additional interest charge not to exceed 12.5 percent of the principal.Pledged goods not redeemed within the grace period shall be automatically forfeited to the pawnbroker by operation of this Code section, and any ownership interest of the pledgor or seller shall automatically be extinguished as regards the pledged item.
   4. Any attempt to circumvent the interest rates and charges as specified in Code Section 44-12-131 shall be null and void.A pawn transaction shall be considered to have been extended or continued unless:
      1. All charges, fees, and the principal have actually been paid or repaid on the previous pawn transaction;
      2. The pledged goods in the previous transaction, including but not limited to a motor vehicle certificate of title, have actually been restored to the possession of the pledgor or seller; and
      3. The pledged goods in the previous transaction have been removed from the business premises of the pawnbroker and, in the case of a motor vehicle certificate of title, any lien on the motor vehicle certificate of title has been removed or released.

(Orig. Code 1863, § 2118; Code 1868, § 2113; Code 1873, § 2141; Code 1882, § 2141; Civil Code 1895, § 2959; Civil Code 1910, § 3531; Code 1933, § 12-704; Ga. L. 1989, p. 819, § 4; Ga. L. 1992, p. 3245, § 5.)

- For annual survey on bankruptcy law, see 69 Mercer L. Rev. 1033 (2018). For note on 1992 amendment of this Code section, see 9 Ga. St. U.L. Rev. 323 (1992).

JUDICIAL DECISIONS

Lien is lost upon surrender of property to debtor.

- The policy of the law as to innkeepers, boardinghouse keepers, and all pawnees and depositaries for hire is that they shall have a lien on the personalty deposited or pawned with them until they are paid for their services, but that they lose such lien by a voluntary surrender to the debtor of the property on which the lien is claimed. Turner v. Priest, 48 Ga. App. 109, 171 S.E. 881 (1933).

- Bankruptcy court found that the creditor was not entitled to summary judgment regarding the debtor's repossessed vehicle action where the pawnshop agreement in issue violated the statutory requirements for automobile title pawns under Georgia law. Johnson v. Speedee Cash of Columbus, Inc. (In re Johnson), 289 Bankr. 251 (Bankr. M.D. Ga. 2002).

Debtors were not entitled to turn over to their estate a motor vehicle that had been pledged pre-petition to a pawn company because the debtors did not exercise their right of redemption within the 30 days allowed for redemption by O.C.G.A. § 44-14-103, the time for redemption had expired before the bankruptcy petition was filed, and the pawn company thus had a valid ownership interest in the car before the petition was filed. Barnette v. Bankers Fin. Servs. (In re Barnette), Bankr. (Bankr. N.D. Ga. Apr. 9, 2008).

LLC that seized a Chapter 13 debtor's car 16 hours before the debtor declared bankruptcy, and sold the car without keeping records, was ordered to pay the debtor $6,579.57 for loss of the car, $300 for lost personal property that was in the car, $2,356.70 in emotional distress damages, and reasonable attorney's fees, pursuant to 11 U.S.C. § 362(k), because the evidence showed that the LLC knew the debtor declared bankruptcy before the LLC sold the car. Although the LLC claimed that the LLC was not liable under § 362 because the debtor forfeited rights in the car pursuant to the Georgia Pawnshop Act (GPA), O.C.G.A. § 44-14-403, when the debtor failed to repay a debt, the court rejected that argument because the LLC assessed interest rates over the course of the contract that exceeded the rates allowed by the GPA, such that a Motor Vehicle Pawn Contract the debtor signed was void from the contract's inception pursuant to O.C.G.A. § 44-12-131. Spinner v. Cash In A Hurry, LLC (In re Spinner), 398 Bankr. 84 (Bankr. N.D. Ga. 2008).

Creditor violated 11 U.S.C. § 362 when the creditor failed to turn over a truck a debtor pledged as security, and the court ordered the creditor to turn over the truck and to pay the debtor $1,400 in damages from lost income and $2,152.50 in attorney's fees. Although the parties entered into a possession pawn agreement, the court found that the agreement violated O.C.G.A. § 44-14-403(b)(1) because the agreement did not give the debtor a grace period for payment, and because the agreement violated § 44-14-403(b)(1) the creditor did not obtain title to the truck before the debtor declared bankruptcy. Ballard v. Freedom Auto Plaza (In re Ballard), Bankr. (Bankr. M.D. Ga. Nov. 1, 2010).

In a case in which a Chapter 13 debtor filed a motion to require the turnover of a truck and the creditor argued that ownership of the truck was forfeited to the creditor prior to the filing of the debtor's first bankruptcy case and that, as owner of the truck, the creditor was entitled to take possession of the truck after the dismissal of the first bankruptcy case and was not required to return the truck to the debtor upon the filing of the current case since the debtor had not redeemed the truck prior to the expiration of the grace period under O.C.G.A. § 44-14-403, the creditor was the owner of the truck at the time the first case was filed. Property of the estate did not include the truck since the debtor had pledged the truck as collateral in a pawn and had not exercised the debtor's right to redeem the property within the time provided in the contract or state law. Crump v. TitleMax (In re Crump), 467 Bankr. 532 (Bankr. M.D. Ga. 2010).

Pawned vehicles were no longer property of the bankruptcy estate at the time of the vehicles' repossession because the debtors had not taken affirmative steps to redeem the vehicles in accordance with Georgia's pawnshop laws. Consequently, the pawnbroker did not violate the prohibition on obtaining possession of property of the estate in 11 U.S.C. § 362(a)(3). Moore v. Complete Cash Holdings, LLC (In re Moore), 448 Bankr. 93 (Bankr. N.D. Ga. 2011).

Debtor was not entitled to turnover of the debtor's vehicle, which was repossessed from the debtor by the respondent, with whom the debtor had entered into a title pawn transaction because the debtor conceded the debtor's inability to redeem the vehicle before expiration of the statutory redemption period, even as extended by the bankruptcy code. Paul v. S. Ga. Title Pawn (In re Paul), 534 Bankr. 430 (Bankr. M.D. Ga. 2015).

When a debtor failed to redeem the certificate of title of the debtor's pawned vehicle by the date as extended by the Bankruptcy Code, ownership of the vehicle transferred by operation of Georgia law to the creditor, any legal or equitable interest that the debtor possessed was extinguished, the vehicle was no longer property of the debtor's estate, and the automatic stay ceased to apply. The automatic stay did not toll the running of the redemption period and, once extinguished, the debtor's rights under the title pawn contract could not be resurrected through the debtor's Chapter 13 plan, and the plan could not be used to extend the redemption period. TitleMax of Ga. Inc. v. Stanfield (In re Stanfield), Bankr. (Bankr. S.D. Ga. Feb. 18, 2016).

The automatic stay did not apply to a pawnbroker as: (1) the debtor filed a 2016 case one day before the redemption period for a title pawn transaction expired, and the redemption period was extended to 60 days from the petition date; (2) the debtor failed to redeem the vehicle when the redemption period expired and on the redemption date, the vehicle belonged to the pawnbroker and the debtor's ownership interest in the vehicle was automatically extinguished; (3) the debtor had no interest in the vehicle when the 2018 bankruptcy case was filed that could become property of the bankruptcy estate; and (4) the 2018 Chapter 13 Plan's treatment of the vehicle as the debtor's property was immaterial as the redemption period had expired pre-petition and the vehicle belonged to the pawnbroker. TitleMax of Georgia, Inc. v. Thorpe (In re Thorpe), 612 Bankr. 463 (Bankr. S.D. Ga. 2019).

Cited in Buena Vista Loan & Sav. Bank v. Grier, 114 Ga. 398, 40 S.E. 284 (1901); Bell v. Instant Car Title Loans (In re Bell), 279 Bankr. 890 (Bankr. N.D. Ga. 2002); Johnson v. Speedee Cash of Columbus, Inc. (In re Johnson), 289 Bankr. 251 (Bankr. M.D. Ga. 2002).

Stolen property acquired by a pawnshop remains the property of the original owner. 1996 Op. Att'y Gen. No. 96-24.