Are Parking & Traffic Violations Dischargeable in Bankruptcy?

chapter 7 discharge petition for NYC

To determine whether parking tickets and traffic violations are forgiven in bankruptcy, one would have to know which type of bankruptcy the debtor is planning to file. In a Chapter 7 proceeding, Section 523(a)(7) of the Bankruptcy Code, the controlling statute on the issue, provides that debts are not dischargeable if it is a “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit.” A debt owed for a parking ticket or traffic violation is a “fine” or “penalty” payable to and for the benefit of the state, city or other local “governmental unit.” Pursuant to this statute, it is safe to assume that a Chapter 7 bankruptcy cannot be used to eliminate governmental fines. However, the attorney fees you might have incurred in fighting the offenses are dischargeable. Moreover, personal injury judgments that were entered in non-DWI/DUI accidents can be forgiven using Chapter 7. For example: if you got into a car accident because you didn’t have your glasses on that day, and your auto insurance was expired at the time, you can discharge any judgment entered against you in that matter in your Chapter 7 bankruptcy.

If you plan on filing a Chapter 13 bankruptcy, you should know that civil fines are dischargeable while fines of criminal nature are not. A parking ticket may be considered a civil matter depending on the state. Driving Under the Influence is labeled a criminal matter in all states, and traffic offenses such as driving with a suspended license or speeding is considered criminal in New York State and in most states. The good news is that if you have failed to pay fines and your driver license has been suspended as a result, filing a Chapter 13 can have your license reinstated as soon your petition is filed. In order to gain more clarification on the matter, consider reviewing Section 1328(a)(2) in the Bankruptcy Code, which lists some of the debts that are not discharged in Chapter 7 and also specifies which of those cannot be discharged under Chapter 13 as well.

Consider speaking to an experienced bankruptcy lawyer who can outline your best options. Filing for bankruptcy, especially if you are filing for a Chapter 13, should NOT be attempted without an attorney. A local bankruptcy lawyer will know how to proceed with certain debts and may able to strategize on how to get non-dischargeable debts discharged. No matter whether you believe a debt is not dischargeable in bankruptcy, it is always best practice to include ALL creditors in your schedules and in your list of Creditors. You never know, you may get lucky.

Mishiyeva Law- Bankruptcy Lawyer NYC 80 Wall Street New York, NY 10005 (646) 736-6328