Not Enough Chapter 13 Filings By People Who Need It Part I

drawing4Peculiar to the Chicago area, is the existence of a large amount of debt owed to governmental units, such as City of Chicago for red light and parking violations and water bills, the State of Illinois Department of unemployment security for unemployment overpayments, Illinois Tollway authority for toll violations, and the County for property taxes. These may be compounded by a bizarre multiplying of penalties in no proportion to the original fine, municipalities who issue fines which are not penalties. Such fines and debts can be discharged under Chapter 13 but not under Chapter 7. This is what prominent consumer bankruptcy attorney Peter Francis Geraci had to say about debts owed to governmental units, such as parking tickets.

“Debts owed to governmental units, such as parking tickets, red light cameras, toll, water bills, and property taxes, are debts for which there is often no solution other than Chapter 13 Debt Repayment. A vehicle that is booted or impounded, or a license that is suspended, because of multiple parking tickets or red light fines, usually in the $2-6000 range, can be rescued by a successful Chapter 13 Plan. Geraci Law is the third largest filer of Chapter 13 cases in the Northern District of Illinois. However, only 25% of our Chapter 13 cases in the Northern District of Illinois, which includes the suburbs and Rockford, have any parking ticket component. In most of those cases, if not all, there is also secured debt such as a vehicle or a home and other debt. There are very few pure parking ticket or red light camera ticket Chapter 13’s. There are Chapter 7 filings with a parking ticket or municipal debt listed, but since those debts are not discharged, the purpose of the Chapter 7 filing is to eliminate other debt, so that the debtor may possibly devote their excess income, if any to clearing up the government debt.”