The City of Chicago’s reliance on aggressive ticketing and punitive collection practices to raise revenue is part of a troubling, nationwide trend that must be considered as the Supreme Court weighs a bankruptcy issue in an upcoming case, Chicago v. Fulton. This argument is contained in a friend-of-the-court brief filed with the Court by the ACLU of Illinois, the ACLU, the Cato Institute, the Fines and Fees Justice Center, the Institute for Justice, the R Street Institute, and the Rutherford Institute.
“For years, Chicago has sought to balance the budget on the backs of the poor through fines, fees, and the punitive practice of seizing and keeping people’s cars when they cannot pay outrageous sums of money. This has propelled thousands who cannot pay crushing debts to seek bankruptcy relief,” said Nusrat Choudhury, the Roger Pascal Legal Director at the ACLU of Illinois. “We have joined in common cause with groups from across the ideological spectrum to urge the Court to consider Chicago’s addiction to fines and fees as part of a nationwide trend that harms people and drives them to bankruptcy when addressing how the bankruptcy system should operate.”
The question at issue in the case is whether the City of Chicago is violating the automatic stay and turnover provisions of the Bankruptcy Code by keeping people’s impounded vehicles locked up upon their filing for bankruptcy, which was established to afford debtors a fresh start.
The brief details the rise of Chicago’s draconian impoundment program. Faced with a budget deficit of $650 million in 2011, Chicago raised fees and fines for parking, traffic, and ordinance violations, and began aggressively enforcing ordinances permitting vehicle impoundment for unpaid fines or driving on a suspended license, including licenses suspended for unpaid tickets. Chicago also levies exorbitant fees for impounding, towing, and storing vehicles, and refuses to return vehicles to their owners without full payment.
Chicago’s aggressive ticketing and fees have had a marked impact. People now owe $1.45 billion in ticket debt dating back to 1990. And, this debt resulting from Chicago’s practices caused a tenfold increase in the number of Chapter 13 filings in the Northern District of Illinois between 2007 and 2017, and caused the median debt owed to Chicago in those proceedings to double.
“Congress intended bankruptcy to provide a fresh start for people struggling with debt,” added Choudhury. “Having access to a vehicle is critical for a person’s ability to earn income and satisfy the repayment obligations at the center of Chapter 13 bankruptcy. Chicago’s position that it can keep cars locked up when people have declared bankruptcy contradicts the language and purpose of the Bankruptcy Code and should be rejected.”