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Pawn

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A pawn is a form of security for a loan where the borrower gives up physical posession of a piece of personal property to the pawnbroker, who then holds the personal property until the loan is repaid. If the loan remains unpaid after a certain period of time (varies from place to place, but usually about 90 days), the pawnbroker may take title to the property.

The pawnbroker holds no better title to the property than the borrower held. As such, in many cases, the pawnbroker may not keep property that has been stolen. Most jurisdicitons require pawnbrokers to submit regular reports of property they have both taken in pawn and purchased, and to obtain contact information for all borrowers and sellers. However, a pawn usually holds better security than other secured creditors.

The pawnbroker may be held liable in conversion if the property is lost, stolen or destroyed during the period of the pawn.

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