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In Chicago, a Vicious Cycle of Tickets, Debt and Bankruptcy

In Chicago, a Vicious Cycle of Tickets, Debt and Bankruptcy

Posted in Bankruptcy In Chicago, a Vicious Cycle of Tickets, Debt and Bankruptcy

You wouldn’t think that a parking ticket could lead you to bankruptcy, but in Chicago it happens all the time. Each year the city issues more than 3 million tickets for parking, vehicle compliance and automated traffic camera violations, for amounts ranging from $25 for broken headlights to $250 tickets for parking in a disabled spot.

If you pay tickets in a timely manner, the matter ends, but what if you can’t afford to pay or forget to do so?  Ticket debt and penalties pile up, especially in the city’s low-income neighborhoods, where people have less money to pay tickets even before their debt mounts to the bankruptcy level.  And many people lose their vehicles.

If you are faced with ticket debts that you can’t pay, the skilled and experienced Illinois criminal law attorneys at Wolfe & Stec, Ltd. can help. We understand the seriousness of your situation and offer aggressive representation for clients struggling to catch up with fines and keep their vehicles. We offer a free consultation to examine the facts of your individual situation and find the best way to defend your rights.

Delaying can only make your situation worse, so call 630-305-0222 today to schedule your free initial consultation.

What Happens With Unpaid Tickets

If you receive multiple unpaid tickets, you will get notice to either pay or contest the tickets.  If you don’t do this on time, fines double, get sent to collections or cause your car to be put on a list to be immobilized by a wheel clamp known as a “Denver boot.”  If your car is booted, you have 24 hours to pay fines — $100 to remove the boot, plus all outstanding ticket debt — or pay a down payment toward a city payment plan.

If the fines aren’t paid in time, the vehicle gets towed, and that means paying a $150 towing fee and a $20-a-day storage fee (which rises to $35 per day) — in addition to the boot fees and ticket payments to get your vehicle back.  Unclaimed cars are sold for scrap metal or at auction, and the proceeds go to the city and towing contractor, not toward reducing your debt.

There is no statute of limitations for unpaid tickets in Illinois, so this becomes a debt you owe forever.  If you accumulate 10 unpaid parking tickets or five unpaid traffic camera tickets, your license can be suspended, and you can be prevented from accessing contracts, licenses and grants for low-income homeowners.

Why Ticket Debtors File Bankruptcy

People file for bankruptcy because doing so may allow them to discharge some or most of their debts and keep their vehicles from being repossessed.  It has been estimated that 3,770 impounded vehicles were returned to Chicago drivers in bankruptcy in 2016.

There are two main types of bankruptcy, Chapter 7 and Chapter 13.  Chapter 7 is fast, and while it requires the liquidation of assets, there are exemptions that allow people, especially poorer ones, to keep many possessions while having most debts eliminated. For Chapter 7, debtors are usually required to pay fees of about $1,000 up front, and poor people often do not have the money to do so. Parking tickets are not discharged in a Chapter 7 case, although you don’t have to pay while the case is open.

There is an “automatic stay” protection benefit of bankruptcy, where drivers can lift license suspensions and keep their vehicles off the boot list for as long as their bankruptcy case is active. People are able to get things like their car, stop a foreclosure, get their license back, or keep a job. However, when Chapter 7 bankruptcies are dismissed, the city can go after drivers, their licenses and vehicles once again.

Chapter 13 allows debtors to have unpaid tickets discharged and also keep assets like a home or car, if they meet a court-ordered three- to five-year repayment plan.

Fines like parking tickets are considered “unsecured,” so you will pay whatever percentage you are paying on all the other unsecured debts. So, if you are paying 10 cents on the dollar to your unsecured creditors and you owe $4,000, you would pay $400.00 and not have to pay the other $3,600. However, you have to complete the plan for the remaining debts to be discharged.

Chicago Crackdown

Because of the automatic-stay provision of bankruptcy, motorists were filing for bankruptcy to get impounded cars released without paying impound fees or ticket debt. Debtors were taking advantage, so the city now puts liens on impounded vehicles. With a lien, the city can hold the car until the underlying ticket debt is recognized as a “secured” claim in bankruptcy court. The debt then must be paid out in full during the bankruptcy payment plan.

Before releasing a booted and towed vehicle, Chicago requires either a $1,000 lump sum, adequate protection payment or 25% of the total debt, whichever is lower, and a provision for the remaining debt to be secured. The city will still release the car upon confirmation of a payment plan as a secured debt. However, debtors have only 24 hours to file a Chapter 13 petition once they have received notice that their car has been booted, so they have to act fast.

Put Your Trust In Us — Contact Wolfe & Stec, Ltd. for a Free Consultation.

When you have problems with tickets that cause your vehicle to be impounded, you need legal assistance immediately if you wish to keep your vehicle. The decision of whether to file a Chapter 7 or a Chapter 13 case should be carefully weighed after reviewing your financial situation and not be based simply on whether parking tickets can be eliminated.

The Illinois criminal defense lawyers at Wolfe & Stec, Ltd. are skilled trial lawyers who believe each case is unique, with its own set of circumstances. We examine the facts, the individuals involved, and the evidence available, and work hand in hand with our clients to come up with an effective strategy. Our goal is always to minimize the negative impact of the situation and to focus on protecting your freedoms, liberties and rights.

We are aggressive litigators and will work with you to answer all your questions and make sure you fully understand the facts surrounding your case and what you can do to mitigate penalties.  We represent clients in DuPage County, Naperville, Aurora, Wheaton, Downers Grove and Bolingbrook, and the greater Chicagoland area.

Delaying can only make your situation worse, so call 630-305-0222 today to schedule your free initial consultation.



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