Kentucky residents who are having a difficult time paying all of their bills sometimes rely on cash advances to make ends meet. A man in Georgia obtained a secured loan from Title Max shortly before he filed for bankruptcy. In exchange for the loan, the man put up the title of his 2006 Toyota Avalon as collateral.

After the Kentucky man filed for Chapter 13 bankruptcy, there was a dispute over whether or not Title Max could still claim his vehicle. A judge for the U.S. District Court for the Middle District of Georgia found that Title Max could not seize the man's car because the car was part of the bankruptcy estate. If the man had not filed for bankruptcy, Title Max would have been able to obtain the full vehicle title after the man failed to pay off his loan.

Before the court made its decision, Title Max had argued that the man's car was not part of his bankruptcy estate and not eligible for protection under the automatic stay. The Title Max loan had already matured, and a 30-day grace period had already passed before the debtor's Chapter 13 plan was confirmed. However, the court found that the car was still part of the bankruptcy estate because the debtor filed his bankruptcy petition before the grace period on the loan was over.

The automatic stay that goes into effect during the bankruptcy process can prevent property from being seized and stop utilities from being shut off. To get the most benefit from an automatic stay, a debtor may want to file for bankruptcy before secured loans are due. An attorney can advise a debtor about how to protect property from creditors by filing for bankruptcy.