## Facts

- Marlene Moffett purchased a used 1998 Honda Accord on installment terms; the seller retained a security interest later assigned to Tidewater Finance Company, which perfected its lien.
- After Moffett missed payments for March and April 2002, Tidewater repossessed the vehicle on April 25, 2002.
- Later the same day, Moffett filed a voluntary Chapter 13 petition.
- Moffett demanded return of the vehicle based on the automatic stay and turnover provisions; Tidewater refused and sought stay relief to sell the car.
- Under Virginia’s U.C.C. provisions, repossession after default remained subject to the debtor’s statutory right to redeem the collateral by satisfying the secured obligations.
- The bankruptcy court found the car was necessary for Moffett’s commute to work and concluded Tidewater was adequately protected under Moffett’s Chapter 13 plan.
- The bankruptcy court ordered Tidewater to return the vehicle and denied stay relief; the district court affirmed.

## Issues

1. Whether, after a prepetition repossession, the debtor’s remaining interests under state law (including the right of redemption) are “property of the estate” under 11 U.S.C. § 541, making the vehicle subject to the automatic stay and turnover under 11 U.S.C. §§ 362 and 542.
2. Whether the bankruptcy court erred in compelling turnover and denying stay relief where the Chapter 13 plan provided for ongoing payments and cure of arrears, thereby adequately protecting the secured creditor.

## Decision

- The Fourth Circuit affirmed the turnover order and the denial of stay relief.
- The court held that Moffett’s statutory right of redemption and related equitable interests under Virginia law became property of the Chapter 13 estate upon filing.
- Because the Chapter 13 plan provided a mechanism to satisfy the secured obligations and protect Tidewater’s lien interest, the vehicle was subject to turnover.
- The bankruptcy court did not abuse its discretion in finding Tidewater adequately protected and refusing to lift the automatic stay.

## Legal Principles

- Under 11 U.S.C. § 541(a)(1), “property of the estate” includes all legal and equitable interests held by the debtor at the commencement of the case, as defined by applicable nonbankruptcy law.
- A secured creditor’s prepetition possession of collateral does not, by itself, exclude the collateral from the estate when the debtor retains meaningful state-law interests, including a right of redemption.
- Under 11 U.S.C. § 542(a), an entity in possession of estate property that the estate may use under 11 U.S.C. § 363 must deliver it to the estate, subject to the secured creditor’s right to adequate protection.
- A Chapter 13 plan may provide for curing arrears and maintaining payments in a manner that effectuates the debtor’s state-law redemption interest while preserving the creditor’s lien and repayment expectations.
- Relief from the automatic stay under 11 U.S.C. § 362(d) may be denied when the secured creditor’s interest is adequately protected by the plan’s payment terms and lien retention.

## Conclusion

The court held that a debtor’s post-repossession redemption and equitable interests under state law enter the Chapter 13 estate, permitting turnover of the vehicle and continuation of the automatic stay when the secured creditor’s interest is adequately protected through plan payments, cure of default, and preservation of the lien.


Tidewater Fin. Co. v. Moffett (In re Moffett), 356 F.3d 518 (4th Cir. 2004)