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Are pricey parking tickets leading to bankruptcy in Chicago?

Bankruptcy Lawyer Bryan W. Stone answers the question: “Can I keep my car if I file bankruptcy?”

 

Everyone has heard that medical expenses are a major cause of bankruptcy filings, and it makes sense. A sudden medical emergency, especially for those without insurance, can be devastatingly expensive, sometimes costing hundreds of thousands of dollars. Another major factor in bankruptcy is job loss. You lose your income, it isn’t a surprise that you lose your ability to keep up with your bills. But what about parking tickets? Surely parking tickets aren’t a contributor to bankruptcy filings. According to some experts in Chicago, they might be.

Tow-truck-Charlotte-Bankruptcy-Lawyer-300x224Experts say that expensive Chicago parking tickets are causing thousands of residents to go to bankruptcy court in an attempt to have their vehicles released from impound lots. In a shocking revelation, one Chapter 13 Bankruptcy Trustee in Chicago, Tom Vaughn, says that out of the 8,800 Chapter 13 bankruptcy cases he oversaw in 2016, an astounding 47 percent listed the Chicago Parking Bureau (the group responsible for impound lots) as a creditor.

 

So what could possibly result in parking tickets causing such serious financial problems? Due to Chicago’s never-ending budgetary problems, ticket prices and late fees have increased rather dramatically in recent years. Experts say that fines and costs can easily rise to $4,000 if a driver doesn’t have cash to solve a problem early, allowing penalties to compound. Chicago takes a notoriously aggressive approach to enforcing parking issues and hands down incredibly expensive tickets. The city now has $1.5 billion in unpaid tickets, more than twice what New York City has outstanding despite the fact that New York City has issued approximately 2.5 times more tickets than Chicago.

 

Not only does Chicago hand down stiff penalties for parking infractions, they are also quick to impound vehicles when drivers fail to pay. To get around the problem, people realized that if they filed for bankruptcy pro se and then took their paperwork to impound lots, this would usually be enough to get them to release their vehicles. Back in 2014, there was a surge of bankruptcy filings aimed at releasing impounded vehicles, leading the city to prosecute several people for filing these fraudulent cases. Procedures were also changed so that impound lots would not release vehicles unless given specific permission by one of the bankruptcy trustees.

 

The problem is a serious one. Thousands of people each year are filing bankruptcy to try and get out from under the expensive parking tickets. In fact, so many have been filing that the Bankruptcy Court in the Northern District of Illinois has had the higher number of Chapter 13 bankruptcy filings in the country for at least three years running.

 

The city recently announced that yet another change involving impounded vehicles and bankruptcy, an attempt to curtail the bankruptcy filings. They’ve said that the city will no longer released impounded vehicles automatically when an owner files bankruptcy. Many see this is one of many steps the city is likely to take over the coming months and years to tackle the problem. Whether these steps will succeed or just make things even harder for low income residents remains to be seen.

 

If you are contemplating bankruptcy in the Charlotte area, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with legally sound advice for your particular situation.

 

Source:

http://news.medill.northwestern.edu/chicago/expensive-chicago-parking-tickets-contribute-to-huge-bankruptcy-filings/

 

 

Image Credit:

http://www.freeimages.com/photo/do-not-park-1445020

 

 

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