Court Rules No Discharge Violation, Debtor’s Plan Language Didn’t Require Vehicle Lien Release Upon Plan Completion

Court Rules No Discharge Violation, Debtor’s Plan Language Didn’t Require Vehicle Lien Release Upon Plan Completion

On April 24, 2019 the Bankruptcy Court for the Northern District of Georgia dismissed an adversary complaint against Portfolio Recovery Associates, LLC (PRA). The complaint asked for damages for PRA’s failure to turnover title to a vehicle paid through the Debtor’s chapter 13 plan.

The Debtor filed a chapter 13 petition and plan on January 11, 2013. The confirmed plan proposed to pay PRA’s claim in full at 4% interest. The Debtor completed the plan payments and the court entered an order of discharge.  Pursuant to the confirmed plan, property of the estate revested in the Debtor upon discharge.

Several months later, Debtor’s counsel sent a letter to PRA asking for turnover of the title to the vehicle within 30 days. Five months later Debtor reopened the bankruptcy and filed the adversary proceeding for violation of the discharge injunction, the order confirming Debtor’s chapter 13 plan, and failure to turnover property of the estate.

PRA filed a motion to dismiss alleging that Georgia state law doesn’t require a lien release because the lien release is granted pursuant to a state statute. Further PRA argued that it committed no affirmative act in failing to release the lien and that neither the confirmed plan nor the confirmation order required turnover of the lien.

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