A question that frequently comes up at consultations in my office is whether traffic tickets can be discharged in bankruptcy. Recently, a client presented with over $7000 of fines related to going through tolls with an invalidSunPass.
11 U.S.C. § 523(a)(7) of the bankruptcy law provides that a Chapter 7 bankruptcy does not discharge an individual from any debt that 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. Therefore, traffic tickets are clearly not dischargeable in a Chapter 7 filing.
There are, however, alternative approaches.
Under Chapter 13, certain fines are dischargeable. Where the fine is imposed as a criminal penalty, it will be non-dischargeable; however, non-criminal fines will be dischargeable. The key is determining whether the parking or traffic violations are deemed “crimes” under the state law where the offenses occurred.
In Florida, traffic offenses are divided into two categories: crimes and civil (non-criminal) infractions. Examples of criminal traffic offenses include DUI, reckless driving, leaving the scene of an accident and knowingly driving with a suspended license. Civil traffic offenses (i.e., non-criminal offenses) include speeding, running a red light or stop sign, illegal U-turns, failure to yield to emergency vehicles and non-moving violations.
In a Chapter 13 bankruptcy, non-criminal traffic fines will be paid as part of a plan that will decrease the amount of the ticket and allow for payment at levels that the debtor can afford by extending the debt over a period of three to five years.
So what can you do about non-dischargeable criminal fines or penalties? You can make payments for a portion of what you owe through a Chapter 13 Plan over a period of 3-5 years. The balance remaining at the conclusion of the Plan will not be discharged.