Getting Rid of Traffic Tickets in Bankruptcy

Fines for parking  and traffic tickets are a big concern for our clients, especially for those who drive professionally for a living. While these fines are rarely a factor in the decision to file for bankruptcy, they can influence which bankruptcy chapter might be the best choice for a debtor’s situation.

PARKING AND TRAFFIC FINES SURVIVE IN A CHAPTER 7 BANKRUPTCY

While a debtor can get rid of most debts in a Chapter 7 bankruptcy, there are some important exceptions. Section 523 of the Bankruptcy Code contains a list of exceptions to the general rule about discharging debts in bankruptcy. Section 523(a)(7) of the Bankruptcy Code states that a debt will survive a Chapter 7 bankruptcy if it is “for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty”.

Traffic and parking fines would be a government fine under this section and not discharged in a Chapter 7 bankruptcy. A debtor filing for Chapter 7 would still be responsible for paying any traffic or parking fines after the bankruptcy was over.

CHAPTER 13 BANKRUPTCY MIGHT WIPE OUT PARKING AND TRAFFIC FINES

The scope of a Chapter 13 discharge is a broader than a Chapter 7 discharge. Governed by Section 1328(a) of the Bankruptcy Code, the exception to dischargeablity for fines related to a criminal case is slightly different than for a Chapter 7 case. Under this section, a debt is not discharged if it is “for restitution, or a criminal fine, included in a sentence on the debtor’s conviction of a crime”.

There is some disagreement in the California legal community regarding whether or not a moving violation is a crime. Traffic violations in California are infractions and not punishable by jail time. In a 1975 cased called People v. Battle, the appellate department of the Los Angeles County Superior Court issued an opinion stating that infractions are not crimes. The issue of whether California traffic and parking violations would be considered “crimes” under the Section 1328(a) remains undecided, but the language in People v. Battle would seem to suggest that a Bankruptcy Court in California would allow the discharge of parking and traffic fines. If a local court refused to recognize the Chapter 13 discharge of traffic or parking fines, it might be necessary to file a lawsuit in Bankruptcy Court called an adversary proceeding to obtain a final ruling on the issue.

Debtors sometimes choose Chapter 13 to get rid of debs that cannot be wiped out in a Chapter 7. On the other hand, choosing a 3-5 year payment plan to get rid of a $500 speeding ticket might seem excessive, so only a qualify bankruptcy attorney can tell you if Chapter 13 is a good fit for your situation. If you are in San Diego County and need help with traffic fines or other debt issues, please call us at (619) 448-2129.

Image credit: chrisyarzab

Car Loan Modifications in Chapter 13 Bankruptcy

Do you have a bad car loan? If your car is worth less than what you owe, it might be possible to use Chapter 13 bankruptcy to lower your balance or interest rate. If other words, you can sometimes “cram down” the principle balance of the loan. Car Loan Cramdown Basics It is commonly believed…

The Hazards of Debt Consolidation With LoanMe

In recent weeks, a lender based in California called LoanMe started flooding local radio stations with advertisements for debt consolidation loans. LoanMe offers unsecured personal loans up to $100,000 and unsecured business loan up to $250,000. Their commercials usually portray a house wife or business owner stressing over credit card debt, offering the appealing simplicity…

Fix the Hole First, Then Bail the Water

You’ve read in the past about signs that might warrant delaying a bankruptcy.  In this article, I want to focus more on unresolved addiction or behavioral issues. Sometimes you need to fix the hole in your boat before you can get rid of the water that’s in it. When I review a client’s matter for…

Putting Your Tax Refund To Good Use

For many bankruptcy attorneys, the first quarter of the year is often a busy time.  Getting out of debt is a popular New Year’s Resolution and bankruptcy attorneys often encourage clients to use their refunds to pay their legal fees for a bankruptcy filing. While doing some research for this article, I read a number…

Tips For A Sane College Tuition Plan

< I recently came across an article about extreme ways to pay for college.  The article offers tips that are out of reach for most people, but I am the parent of a high school senior and wanted to offer a few things that I have learned. While I usually write about bankruptcy-related topics, financial…

Back to Birthday Sanity

or send is an email As a bankruptcy paralegal, one of my of my primary tasks is to go over a client’s budget. How much money you spend can make all the difference between qualifying for Chapter 7 bankruptcy or a Chapter 13 bankruptcy.  I also like to help educate our clients in proper budgeting…

5 Signs That You Should Wait to File Bankruptcy

A few years ago, I wrote an article called 5 Signs That It May Be Time to File Bankruptcy.  It proved to be very popular and a number of my colleagues requested permission to use in on their websites.  There are also instances when the timing of a bankruptcy filing is nearly as important as the…

The Hazards of Tribal Payday Loans

A few years ago, I appeared on a local news station to discuss the problems payday loans: The interest rates on payday loans can often reach 365% or more.  You can read more about the pitfalls of payday loans in this article that I wrote after doing the television interview. What I recently discovered is…

Consumer Alert: Sun Diego RV and Rice RV

A client recently reported to me a billing dispute and deceptive business practices by Sun Diego RV which is also known as Rice RV.  According to its website, Sun Diego is an RV parts, service and rental business.  Sun Diego enjoys an “F” rating with the Better Business Bureau (“BBB”) and a 1.5 star rating on Yelp….