In re: Leroy Williams concerned the ability of a creditor to collect on collateral which is also redeemable by the debtor. It involved the case of a debtor who filed a Chapter 13 action and whose corporation once owned buses which were held as collateral for the debtor’s secured debt.
The debtor claimed that, since the buses were collateral that could be redeemed by the debtor, the creditor could not repossess the buses without violating the automatic stay put into effect through the debtor’s filing of his bankruptcy petition. The Court ruled that, since the buses were owned by the debtor’s corporation and not the debtor, the buses were not considered to be part of the bankruptcy estate and the creditor could repossess the buses without violating the automatic stay.