Chicago area drivers who tried to avoid paying impound fees for their vehicles
allegedly participated in a bazaar scheme that included filing false
bankruptcy petitions. Local and state investigators found a significant number of "pro-se"
bankruptcy filings (individuals who filed without an attorney) after the
U.S. Trustee's Office identified over 1,000 filings were completed.
Most cases presented similar details with debtors claiming they were unable
to pay bankruptcy filing fees.
In the city of Chicago, Illinois, hundreds of drivers allegedly tried to
file bankruptcy to avoid paying heavy fines related to impound fees and
retrieval of their towed vehicles. The scheme supposedly has been carried
out by residents over the past year. Recently, a 30 year old man was arrested
and released on fraud-related charges in playing a role that included
showing other drivers how to file bankruptcy. He took a cash bribe of
$600 to help people file a false bankruptcy petition.
The idea was to use the filing to get their vehicle out of the city auto
pound lot and avoid the fees. Drivers would try to get their vehicle under
the automatic stay that goes into effect when you file. People who are
on a fixed or low income or seeking desperate options to get their vehicle
back ended up participating in the scheme. A Chicago area bankruptcy attorney
who is not connected with any of the cases claims this is the first time
anything like this has happened in the city.
Only one person was arrested for their involvement but the City Finance
Department reviewed documentation that showed the scheme was widespread.
Over 1,000 people filed a petition on their own and neither a bankruptcy
attorney or official is associated with any of the filings. Most debtors
named the same creditor on their petition: the Revenue Department and
the impound lots.