This fact distinguishes Debtors position, herein, from the position of the debtors in Dunlap v

Alternatively, Appellants argue that this action is not required and that the title passes automatically at the conclusion of the redemption period.

R. 492 (Bankr

§ 108(b): «Except as provided in subsection (a) of this section, if applicable nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an agreement fixes a period within which the debtor or an hours individual protected under section 1201 or 1301 of this title may file any pleading, demand, notice, or proof of claim or loss, cure a default, or perform any other similar act, and such period has not expired before the date of the filing of the petition, the trustee may only file, cure, or perform, as the case may be, before the later of

(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or

The Bankruptcy Act does include provisions invalidating certain security interests as fraudulent or as improper preferences over general creditors. 1 U.S.C. § 96(a) and (b). Otherwise, Congress has generally left the determination of property rights in the assets of a bankrupt’s estate to state law. Butner v. United States, 440 U.S. 48, 54, 99 S. Ct. 914, 917, 59 L. Ed. 2d 136 (1979).

It is apparent that the legal assistant to the General Counsel of Cash America, who wrote the letter, was unaware of the factual distinctions as well as the fact that Texas law and regulations would distinguish this case from the cases which were the basis of Cash America’s position given in the letter.


It is undisputed that Debtors had failed to redeem the pawned property within the initial thirty day redemption period and that the additional statutory sixty day redemption period was still in effect on the Petition Date. Neither did the Debtors, or the trustee, redeem the property at any time during the sixty day period, which expired during the pendency of the bankruptcy action. Under this set of facts, the Court must determine whether the pawned goods were part of the bankruptcy estate. Only property in which debtor has a legal or equitable interest can become «property of the estate.» 11 U.S.C. § 541(a) (1).

Appellant further argues that a Debtor’s contractual right to redeem pawned property from a Texas pawn shop can not be modified in a Chapter 13 proceeding. Appellant cites In re Dunlap, 158 B.R. 724 (M.D.Tenn.1993) and In re Jackson, 133 B.R. 541 (Bankr. W.D.Okla.) to support this proposition. Cash America was likewise appellant in both cases. The Court notes that in Dunlap the statutory *422 redemption periods for the various pawn transactions had expired prior to the filing of the bankruptcy petition. Tennessee law required the pawnbroker to mail a notice to the debtor that he had ten days within which to redeem his property, or it was forfeited. The pawnbroker fulfilled that statutory requirement. This was all done prior to the Petition Date. The court held the property was not in the bankruptcy estate because Debtors no longer had any legal or equitable interest in the pawned property under Tennessee law.

A second line of cases, the minority position, suggests that the all encompassing nature of § 362(a) overrides the specific extension of time granted in § 108(b), thus preventing the parties from taking any action with respect to estate property. These cases suggest that the property will remain property of the estate even after the expiration of the sixty day add-on redemption period. See In re Jenkins, 19 B.R. 105 (D.Col.1982), In re Sapphire Investments, 19 B.D.Ariz.1982); In re Shea Realty Inc., 21 B.R. 790 (Bankr.D.Vt. 1982); In re Dohm, 14 B.R. 701 (Bankr. N.D.Ill.1981); In re Johnson, 8 B.R. 371 (Bankr.1981).

It is concluded that the bankruptcy court did not err in holding that the pawned property was property of the bankruptcy estate. However the Debtors’ contractual right to redeem pawned property from a Texas pawn shop can be modified in a Chapter 13 proceeding only to the extent that the 60 day redemption period provided by § 108(b) applies. The Court finds that the automatic stay provisions of 11 U.S.C. § 362(a) do not apply to the pledged goods in this case, and that Debtors were not entitled to actual damages. Accordingly, the Judgment on Turnover Action entered by the Bankruptcy Court on July 17, 1996 shall be, and is hereby AFFIRMED in part and REVERSED in part.