## Facts

- Judy L. Johnson filed a Chapter 13 petition in February 2005 while owning two vehicles subject to purchase-money security interests held by GTE Federal Credit Union (GTE).
- The bankruptcy court dismissed the Chapter 13 case in March 2005.
- After dismissal and before the case was reinstated, GTE repossessed both vehicles: a 2002 Buick Rendezvous and a 2003 Chevrolet G2500.
- In April 2005, the court reinstated the Chapter 13 case, which reimposed the automatic stay under 11 U.S.C. § 362(a).
- GTE moved for relief from stay as to both vehicles.
- At the time the Chapter 13 trustee responded, Johnson’s plan did not provide for GTE’s secured claims, and Johnson was delinquent in payments to the trustee.
- Johnson later filed claims on GTE’s behalf and amended the Chapter 13 plan to include monthly payments to GTE for the vehicles.
- Johnson filed a motion to compel turnover of the repossessed vehicles, arguing the vehicles were property of the estate and necessary for reorganization.
- Johnson did not offer to tender a lump-sum redemption payment; she proposed to retain the vehicles through plan payments over time.

## Issues

1. After a Chapter 13 case is dismissed, the creditor repossesses the debtor’s vehicles, and the case is later reinstated, are the vehicles “property of the estate” such that turnover may be ordered under 11 U.S.C. § 542?
2. If the debtor’s post-repossession interest is only a statutory right of redemption under Florida law, can the debtor compel turnover by proposing to pay the secured debt through monthly Chapter 13 plan payments rather than a lump-sum redemption?

## Decision

- The court held that the vehicles were not property of the estate at the time Johnson sought turnover.
- The court reasoned that the vehicles were property of the estate upon the original Chapter 13 filing, but upon dismissal they ceased to be estate property.
- The court held that GTE’s repossession during the dismissal period transferred ownership to GTE under Florida law, leaving Johnson only a statutory right of redemption.
- The court concluded that reinstatement reimposed the automatic stay, but the stay protected only Johnson’s remaining redemption right; it did not restore the vehicles themselves to the bankruptcy estate.
- The court rejected Johnson’s argument that revisions to Florida’s Article 9 changed the Eleventh Circuit’s Florida vehicle-ownership analysis.
- The court denied Johnson’s motion for turnover because § 542 turnover is available only for property the trustee may use, sell, or lease (i.e., estate property), and Johnson’s plan proposal of monthly payments did not constitute a redemption tender.

## Legal Principles

- Whether an asset is “property of the estate” under 11 U.S.C. § 541 is determined by the debtor’s legal and equitable interests under applicable nonbankruptcy law.
- Dismissal ends the bankruptcy estate’s interest in property; property that was estate property on filing does not remain estate property after dismissal.
- Under Florida law, as interpreted by the Eleventh Circuit in Bell-Tel Federal Credit Union v. Kalter (In re Kalter), ownership of a motor vehicle passes to the secured creditor upon repossession; the debtor retains only a statutory right of redemption.
- Reinstatement reimposes the automatic stay under § 362(a), but it does not retroactively recreate estate ownership of collateral that, under state law, became the creditor’s property during the dismissal period.
- A debtor’s post-repossession statutory right of redemption (Fla. Stat. § 679.623) is a limited interest distinct from ownership of the vehicle.
- Turnover under 11 U.S.C. § 542 requires that the item sought be estate property that the trustee can use under § 363; a mere redemption right does not support an order compelling a creditor to surrender a repossessed vehicle.
- A Chapter 13 plan proposing installment payments is not the same as exercising Florida’s redemption right, which requires tender consistent with the statute rather than payment over time through a plan.

## Conclusion

In re Johnson holds that when a Chapter 13 case is dismissed and, during that dismissal period, a secured creditor repossesses the debtor’s vehicles, reinstatement of the case reimposes the automatic stay but does not make the vehicles estate property again under Florida law; the debtor retains only a statutory right of redemption, and turnover under § 542 is therefore denied where the debtor offers only ongoing plan payments rather than a redemption tender.


In re Johnson, 328 B.R. 234 (2005)