In re Jones
United States Court of Appeals for the Fourth Circuit
591 F.3d 308 (2010)
David and Kirsten Jones (plaintiffs) financed a vehicle purchase from DaimlerChrysler Financial Services (DaimlerChrysler) (defendant) under a contract containing an ipso facto clause treating bankruptcy filing as default; when David filed Chapter 7, he indicated on his paperwork that he intended neither to redeem the vehicle nor reaffirm the debt, simply stating he would continue making payments, and the statutory 45-day redemption/reaffirmation period expired without action. DaimlerChrysler obtained relief from the automatic stay and repossessed the vehicle under the ipso facto clause; the bankruptcy court ordered the vehicle returned based on the Fourth Circuit's previously recognized "ride-through" doctrine, but the district court reversed, and the Joneses appealed.
Whether a Chapter 7 debtor who fails to timely redeem or reaffirm a purchase-money secured debt, but who remains current on payments, may still retain the collateral under a "ride-through" option, or whether the creditor may instead enforce a contractual ipso facto clause and repossess the property.