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.

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Carl Starrett

Carl Starrett is a consumer bankruptcy attorney in San Diego, California helping debtors file for protection under Chapter 13 and Chapter 7 of the Bankruptcy Code.

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