PENNSYLVANIA BANKRUPTCY COURT GRANTS STAY RELIEF AND DENIES DEBTOR’S REDEMPTION REQUEST

The bankruptcy court for the Middle District of Pennsylvania denied debtor Jamie Marie Bowman’s motion to redeem her 2019 Mazda CX-5 which was included as an asset in her Chapter 7 bankruptcy proceedings. In re: Bowman, Case No. 5:25-bk-01580-MJC (MD Penn., January 12, 2026). The vehicle was subject to a $16,919.00 lien held by People First Federal Credit Union (“FCU”) which loan Bowman had stopped making payments on several months before.

Bowman sought to redeem her vehicle based on § 722 i of the bankruptcy code which allows a consumer debtor to redeem tangible personal property used primarily for personal or family use if the debtor pays the value of the secured portion of a creditor’s claim. The determined value of the personal property is paramount in redemption proceedings. If the redemption value is less than what is owed the debtor can pay that amount to the creditor and redeem the property. If the redemption value is more than what is owed redemption will be denied.

Bowman argued her vehicle was only worth $4,037.00 based on a dealership’s estimated trade in value, reduced by the cost of needed repairs (which she failed to substantiate with competent evidence). FCU opposed redemption arguing the vehicle value was at least $10,000 based on a “nationwide search on Cars.com” which revealed comparable vehicles were valued between $9,500.00-$14,498.00. The court rejected Bowman’s valuation which she improperly based on the trade-in value of the vehicle rather than the retail sale price.

Under § 506(a)(2) ii the standard for valuation is the cost to replace the item. The valuation proposed by Bowman was what a dealership said they would pay to purchase the car from Bowman. It was not the retail value it would seek from another buyer. The court found FCU’s evaluation was proper and supported by competent, credible evidence. The court also noted it was Bowman’s burden to prove the redemption value by a preponderance of the evidence, and she failed to meet that burden.

The court also considered FCU’s request for relief from the automatic bankruptcy stay. Ostensibly, FCU intended to repossess the vehicle and could not do so with the pending stay. The court determined, under § 362(d), FCU was entitled to relief from the stay since FCU’s lien was not adequately protected by the collateral, Bowman failed to make the required monthly car payments, Bowman did not have equity in the vehicle, and the vehicle was not “necessary to an effective reorganization.” iii The court explained, under the circumstances of this case, cause existed to grant FCU relief from the stay.

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1. The bankruptcy court for the Middle District of Pennsylvania denied debtor Jamie Marie Bowman’s motion to redeem her 2019 Mazda CX-5 which was included as an asset in her chapter 7 bankruptcy proceedings. In re: Bowman, Case No. 5:25-bk 01580-MJC (MD Penn., January 12, 2026). The vehicle was subject to a $16,919.00 lien held by People First Federal Credit Union (“FCU”) which loan Bowman had stopped making payments on several months before.

2. Bowman sought to redeem her vehicle based on § 722 of the bankruptcy code which allows a consumer debtor to redeem tangible personal property used primarily for personal or family use if the debtor pays the value of the secured portion of a creditor’s claim. Bowman argued her vehicle was only worth $4,037.00 while FCU argued the vehicle value was at least $10,000. The court rejected Bowman’s valuation because she improperly based it on the trade-in value rather than the retail sale price and denied Bowman motion to redeem.

3. The court also determined, under § 362(d), FCU was entitled to relief from the automatic bankruptcy stay since FCU’s lien was not adequately protected by the collateral, Bowman failed to make the required monthly car payments, Bowman did not have equity in the vehicle, and the vehicle was not “necessary to an effective reorganization.” The court explained, under the circumstances of this case, cause existed to grant FCU relief from the stay.

i 11 U.S.C. § 722.

ii 11 U.S.C. § 506.

iii 11 U.S.C. § 362(d).

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