Chicago considering allowing Chapter 7 Bankruptcy to wipe out ticket debt

From WBEZ:

The Chicago City Council’s finance committee approved a measure Monday that would forgive ticket debt for some city motorists, but only those who file for Chapter 7 bankruptcy.

The move is meant to steer indebted drivers away from Chapter 13 bankruptcies that rarely eliminate their debt. The proposed reform, which comes amid growing calls to overhaul the city’s ticketing and debt collection practices, was drafted by the Law Department and included in the 2019 budget package approved by the finance committee.

The measure would wipe away unpaid tickets, fines and fees issued more than three years before debtors file for a Chapter 7 bankruptcy, as long as their bankruptcy plan is successful and they complete a city payment plan for more recent ticket debt. Late penalties and other fines, including boot and impound fees, would also be forgiven.

The measure seeks to address a significant problem uncovered in a ProPublica Illinois report in February: that thousands of mostly black and low-income motorists are filing for Chapter 13 bankruptcy to cope with the consequences of unpaid parking and automated-traffic-camera tickets that often lead to license suspensions and vehicle seizures.

Chapter 13 is the only kind of bankruptcy in which municipal debt, such as unpaid tickets, can be forgiven. But it is rarely a good long-term solution for many people, particularly those with ticket debt. That’s because this type of bankruptcy requires debtors to hand over their disposable monthly income for up to five years, which people with limited incomes often find challenging.

If they stop making payments and their bankruptcy cases get dismissed, debt collectors can come calling again, and threaten license suspension and vehicle seizure. Fewer than one in four of these cases end with debtors successfully completing a payment plan and emerging from bankruptcy, ProPublica Illinois found.

Chapter 7 bankruptcies, on the other hand, almost always end with debt relief. But motorists in Chicago don’t often go that route for two reasons: Ticket debt can’t be forgiven using this kind of bankruptcy, and most lawyers require their fees to be paid in full before they file for bankruptcy protection…

Read the rest of the story here:  https://www.wbez.org/shows/wbez-news/chicago-considers-wiping-away-old-ticket-debt-for-motorists-who-file-for-chapter-7-bankruptcy/5407d3aa-1e5e-4e27-bc3d-4884c9b86c8f?utm_campaign=Daily_Newsletter_Daily-Rundown_Non-Members_20181106&utm_medium=email&utm_source=Eloqua&mi_ecmp=News_Newsletter_Daily-Rundown-250ok_Custom_20181106%20-%20Batch&mi_u=960554

City of Chicago to offer amnesty and new payment plans for old parking and red light citations

I am posting this story to spread the word for people who have suspended driver’s licenses due to unpaid tickets.  (I don’t represent people seeking to clear parking or red light tickets from their record or trying to work out payment plans, so please don’t contact me about doing that).

From a story by John Byrne in the Chicago Tribune:

Mayor Rahm Emanuel is … offering an amnesty program for people who have unpaid tickets and back taxes they owe the city.

Under the program announced Friday, people or businesses with parking tickets and other vehicle violations, back taxes, and other fines or fees issued before 2012 would be eligible for amnesty.

Emanuel’s office did not give specifics on how much of a break applicants would get on the late fees and fines that have added on to their unpaid debts. The city has offered several past traffic ticket amnesty programs, so it isn’t clear how much money such a program will raise to help reduce a property tax increase of between $450 million and $550 million that Emanuel is expected to call for under the budget…

The mayor’s office said Friday that the city also plans to give motorists payment plan options to try to help them start paying for vehicle tickets before late fees accrue.