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False Bankruptcy Filings Used by Hundreds of Drivers to Avoid Impound Fees

Posted By Allmand Law Firm, PLLC || 13-May-2013

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.


Categories: Bankruptcy Fraud
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