Is a Pawn a Loan?
By legal definition a Pawn is not a Loan. One reason is the pawner completely relinquishes all rights to the pledged item/s. There is no obligation by the pawner to repurchase. In addition, the pawner is also not responsible for any unforeseen loss or costs (unless item is deemed stolen by authorities) regardless. Defaulted pawns are not reportable to credit bureaus. In conclusion garnishment can not be levied against Pawners. Pawners also can not be subject to collections.
Purpose of a Pawn
A pawn provides cash for a short term without a credit check. By using owned property a pawner can obtain funds within minutes. Also, this ability to receive cash in minutes is wonderful way to pay unexpected bills, avoid paying higher late fees, and so on. Without having to sell valuables outright already owned items can be turned into emergency cash, to never be seen again.
Colorado Pawn Law defined
General Assembly of the State of Colorado
Concerning the regulation of pawnbrokers.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 12-56-101 (1), (2), and (3), Colorado Revised Statutes, are amended to read:
12-56-101. Definitions. As used in this article, unless the context otherwise requires:
(1) “Contract for purchase” means a contract entered into between a pawnbroker and a customer pursuant to which money is advanced to the customer by the pawnbroker on the delivery of tangible personal property by the customer on the condition that the customer, for a fixed price and within a fixed period of time, not to exceed ninety to be no less than thirty days, has the option to cancel said contract.
(2) “Fixed price” means the amount agreed upon to cancel a contract for purchase during the option period. Said fixed price shall not exceed:
(a) One-tenth of the original purchase price for each month, plus the original purchase price, on amounts of fifty dollars or over; or
(b) One-fifth of the original purchase price for each month, plus the original purchase price. on amounts under fifty dollars.
(3) “Fixed time” means that period of time, not to exceed ninety to be no less than thirty days, as set forth in a contract for purchase, for an option to cancel said contract.