- Case Type:
- Case Status:
- 21-1355 (7th Circuit, Apr 21,2022) Published
- Possessory liens on vehicles that were impounded for failure to pay parking tickets are avoidable as judicial liens under 11 U.S.C. § 522(f).
- Procedural context:
- The City of Chicago appealed the district court's order affirming the bankruptcy court's decision that a lien for unpaid parking tickets is a judicial lien and thus is avoidable under 11 U.S.C. § 522(f).
- Drivers and vehicle owners owe Chicago more than $1.8 billion for unpaid parking tickets. Revenue from parking tickets constitutes 7% of Chicago's operating budget. On the other side, aggressive ticketing and related practices drive many people into bankruptcy, so that Chicago is an outlier in bankruptcy filings.
Failure to pay tickets allows Chicago to impound vehicles under a city ordinance. Chicago can then sell the vehicles to pay down the ticket debt.
In this case, Marcella Mance failed to pay parking tickets. Chicago impounded her car and asserted a $12,245 possessory lien, even though Mance's car was worth about $3,000. Mance filed a Chapter 7 petition and sought to avoid the lien under § 522(f). The bankruptcy court granted her motion.
- SYKES, KANNE and HAMILTON
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