In re Leavell

Alfreda Leavell (debtor) filed for Chapter 13 bankruptcy on December 8, 1994. Leavell’s net monthly income was $1,550. On December 14, 1994, without disclosing her bankruptcy status, Leavell purchased a ring and a VCR from Littmans, Inc., but failed to pay for the items. In February 1995, Leavell’s Chapter 13 plan was confirmed. The plan revested all of the bankruptcy estate’s property in Leavell upon confirmation and required Leavell to pay $75 per month for 36 months. In July 1995, Littmans obtained a judgment against Leavell based on Leavell’s failure to pay for the ring and VCR. Littmans began garnishing $417.59 per month from Leavell’s income to satisfy the judgment. When Leavell’s attorney learned about the garnishment, the attorney notified Littmans’ counsel, W. Wayne Tiffany, about the Chapter 13 case and asked Tiffany to dismiss the garnishment. Tiffany refused. Leavell subsequently sought a contempt finding and sanctions against Littmans and Tiffany, asserting that the garnishment action violated the automatic stay of collection actions against property of a bankruptcy estate to satisfy a debt incurred after the debtor filed the bankruptcy petition. Littmans and Tiffany argued that because confirmation of Leavell’s Chapter 13 plan vested all property of the bankruptcy estate in Leavell, there was no remaining estate property to be protected by the stay.