Dealing with Fines in Bankruptcy

HOW BANKRUPTCY COULD HELP WITH PROBLEM RENEWING DRIVER LICENSE 

One of the worst situations faced by clients is when their driving privileges or tags are flagged as a result of fines or other obligations due to the State of Maryland. Clients at times come to our Maryland bankruptcy attorney complaining that they cannot drive because they are unable to renew their license. This is unfortunate and in some cases may not be something that can be fixed by filing a bankruptcy. The clearest example of what can be remedied if the situation where the license is either revoked or cannot be renewed because the client was in an accident without insurance and there was damage that had to be paid by either the state of Maryland or another insurer. These uninsured motorist cases will easily be resolved by the State once either a Chapter 7 or Chapter 13 is filed.

TICKETS, PENALTIES – DIFFERENT TREATMENT IN CHAPTER 7 AND CHAPTER 13

More difficult are cases where the suspension or flag is due to a fine for having an insurance lapse, parking tickets, camera tickets or toll penalties. The problem discharging these obligations is that the fines are specifically excluded from being discharged in Chapter 7 cases by Section 523(a) (7) of the bankruptcy code.  This section prevents a discharge of civil fines unless those fines are designed to compensate the government entity for the damage caused by the violation. Thus parking fines, insurance lapse penalties and the like are most likely not going to go away with a Chapter 7 case.

In a Chapter 13 case the result for clients may be different depending on the nature of the fines or penalties. The discharge provisions of Chapter 13 are slightly broader than in Chapter 7. In Chapter 13 civil fines and penalties can be discharged based on Section 1328 (a) (2) of the bankruptcy Code. Interpretation of this section is not as simple as it might seem however since one still needs to determine if the fines or penalties are civil or criminal in nature or will not go away for other reasons. Criminal fines, criminal restitution awards will not be discharged under Section 1328 (a) (3) of the Bankruptcy Code.

FRAUD PROVISION IN BANKRUPTCY

The fraud provisions and the exclusion from discharge for “willful, malicious injury” still might apply depending on the circumstances. For example if the client is a scofflaw and has so many fines that it shocks the conscience the Bankruptcy court might have a harder time letting these debts get discharged even in a chapter 13 case.

EXPERIENCED MARYLAND BANKRUPTCY ATTORNEY

This is a complicated area requiring careful analyses of the particular situation by an experienced Maryland Bankruptcy lawyer before any determination can be made whether the fines or penalties will be dealt with in the bankruptcy and discharged. The other consideration is can whether the State will be required to issue a drivers license or to remove flags. This again will require assistance by an experienced bankruptcy lawyer.

Ellicott City Flood 2016

2016 Flood

Within two hours last Saturday much of historic Ellicott City was devastated by a flash flood. While the Broumas Law Group Law office is up on the hill and was not directly affected the scene of devastation in this lovely historic city is heart breaking. Within those two hours the city had a normal month’s quota of rain. The flood took everyone by surprise, visitors were seen driving on the street while the flood waters were rising until cars were ultimately engulfed and swept down the road with their occupants still in them.

The aftermath of the disaster is significant. Two people lost their lives, twenty five buildings were seriously damaged and cars were strewn everywhere some even left resting on top of trees. While the clean-up was started immediately, the effect of the storm will be long lasting. More than twenty cars are still in the Patapsco River. It is a sad day for all those who live and love Ellicott City.

This is not the first time Ellicott City has had a substantial and destructive flood. There have been major floods in the city in 1817, 1837, 1868, 1923, 1952, 1972 and 2016. In 2011 there was another flash flood of lesser magnitude also causing significant damage to the city. That 2011 flood weakened a 200 year old retaining wall at the historic Saint Paul’s Church causing the rock retaining wall to fall and destroy several cars including two of ours. This time we were more fortunate.

Many of our bankruptcy clients are calling after seeing the reports of devastation to make sure the office is still alright. Fortunately our law office is up on the hill by the Circuit Court and did not suffer any damage from the storm.