Impounded Cars Not Always Released After Bankruptcy

Of the 8,809 Chapter 13 consumer bankruptcy filings that attorney Tom Vaughn, a Chapter 13 Bankruptcy Trustee in Chicago, oversaw in 2016, 47 percent listed the Chicago Parking Bureau as a creditor, according to Vaughn’s office. Up until this year, the City of Chicago routinely released impounded vehicles after the owner filed for bankruptcy and often those bankruptcies were filed for no purpose other than to obtain the release of the car. However, starting January 1, 2017, the City has been arguing that it holds a perfected lien upon the impounded vehicle and does not have to automatically release it upon a filing. The City, however, appears to be willing to offer a hardship payment plan for certain individuals.

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