Mitchell v. BankIllinois (In re Mitchell)
United States Bankruptcy Court for the Southern District of Texas
316 B.R. 891 (2003)
BankIllinois (defendant) repossessed Georgina Mitchell's (plaintiff) financed vehicle after she fell behind on payments; immediately afterward, Mitchell filed for Chapter 13 bankruptcy, notified BankIllinois, provided proof of insurance, and demanded the car's return, which BankIllinois refused. Mitchell sued in bankruptcy court, and BankIllinois argued the car never became part of Mitchell's bankruptcy estate because it was repossessed before she filed; the bankruptcy court disagreed, found BankIllinois had violated the automatic bankruptcy stay, and ordered the car returned. BankIllinois appealed.
Whether a debtor who declares bankruptcy owns collateral held by a secured creditor until the collateral is sold.