§ 1326

In re Bailey

After the debtors'chapter 13 case was dismissed, but before movant chapter 13 trustee could distribute the accumulated plan payments to the debtors, a creditor served the trustee with a garnishment under Oregon law. The trustee moved for instructions on whether the trustee was required to honor the state law garnishment for the plan payments collected prior to dismissal.
Ruling: 
Debtors were entitled to return of funds held by a trustee following dismissal of their unconfirmed chapter 13 case over a creditor's state garnishment claim.
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