City of Chicago v. Marshall

Chicago makes a car’s owner, rather than its driver, liable for many fines, including those for speeding, running a red light, and illegal parking. After their Chapter 13 bankruptcy payment plans were confirmed, the seven debtors incurred, and failed to pay, at least 72 fines aggregating almost $12,000. The debtors argued that a Chapter 13 plan does not provide for the payment of post-petition fines and that the automatic stay of 11 U.S.C. 362 prevented their cars from being towed or booted. The bankruptcy court ordered that the vehicles were the property of the estate for the duration of the payment plan. Reversing the order, the Seventh Circuit noted that the holding could be seen as permission to violate traffic laws with the fines never to be paid. The court noted that, while a Chapter 13 petition transfers most of the debtor’s assets to the bankruptcy estate, upon the confirmation of a payment plan, 11 U.S.C. 1327(b) presumptively returns that property to the debtor, who becomes personally responsible for the expenses of maintaining the property. The bankruptcy court gave no explanation for departing from that scheme. View "City of Chicago v. Marshall" on Justia Law