Dist Ct. and Bankruptcy Ct. erred in treating fines that debtors incurred in either illegally parking or running red lights after Bankruptcy Ct. had confirmed debtors’ Chapter 13 payment plans as not administrative expenses that could be paid from debtors’ bankruptcy estate, where said courts believed that paying said fines did not promote debtors’ interests. Moreover, effect of said courts’ orders meant that City of Chicago could not seize, tow or immobilize debtors’ cars in order to collect on said fines due to automatic stay of 11 USC section 362. However, Ct. of Appeals found that Bankruptcy Code could not be read to enlist judiciary’s aid in permitting debtors to violate law. As such, Ct. found that said fines should be treated as administrative costs that must be paid promptly and in full.
Federal 7th Circuit Court
Civil Court
Bankruptcy