1. Yes or the lender can go to the bankruptcy court and get an order allowing it to repossess it during the bankruptcy. If the debtor elected to reaffirm the debt, with bankruptcy court approval, he could keep the car if he made the payments. The 1000 exemption only applies to unsecured creditors, the title loan company would be a secured creditor.
2. in my state, you would own the car, subject to their security interest and any interest claimed in the car by the bankruptcy trustee.